House of Lords
Introduction: The Lord Bishop of Birmingham
Public Expenditure: Value for Money
(14 years ago)
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Lord Haskel
To ask Her Majesty’s Government how they assess value for money when allocating public expenditure.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, value for money is a key consideration when allocating public expenditure. The spending review has prioritised growth and fairness, underpinned by radical reform of public services. Departments were asked to prioritise spend against tough value-for-money criteria set out in the spending framework and the economic value of all capital projects was considered. In addition, public ideas were sought on how to make savings and deliver more for less.
Lord Haskel
My Lords, I thank the Minister for that rather narrow accountant’s view of value for money. What prompted this Question was when the Prime Minister said recently that there was more to life than money. He said it in the context of the extra value that we get from sport, the arts and having a roof over our heads.
Lord Haskel
The question is coming. The Prime Minister said it in the context of the extra value that we get from sport, the arts and social capital. My question is: will the Minister say how these non-monetary values are taken into account when assessing value for money?
Lord Sassoon
My Lords, questions about value for money are asked in the context of a wide range of other factors that are all set out in the Government’s Green Book, which is a 100-page document that has been used for 20 years or so. It has become a model of its kind around the world, and sets out value for money in the context of the complete range of factors that have to be considered.
Lord Newby
My Lords, does the Minister agree that the effectiveness of public expenditure would be greatly enhanced by the abolition of the 4,000-plus central government targets over local government that was announced by the Chancellor last week? Will the Minister look at adopting a similar approach to other parts of the public sector, including the police and NHS, so that front-line staff can spend most of their time serving the public rather than completing unnecessary bureaucratic paperwork?
Lord Sassoon
I completely agree with my noble friend that the overlay of unnecessary, wasteful targetry that the last Government imposed absolutely detracted from the fundamental consideration of value for money. To emphasise the point, it was not just over 4,000 but 4,700 targets that were swept away from local authorities, enabling them to get on better and do what really matters for citizens.
Lord Jones of Birmingham
Could the Minister please explain where the value for money exists in public expenditure when we constantly untie our overseas aid? Japan, America, Germany and France do not. This is a time when we could have a win-win of increasing the overseas aid budget and helping nations that need our wealth while creating jobs at home and tax from profits at home, rather than doing what we are doing, which is to give taxpayers’ money without any custodianship and keeping no control, therefore creating jobs in Japan, France and America.
Lord Sassoon
My Lords, the first thing to re-emphasise is that we have maintained overseas aid expenditure to meet our commitment of 0.7 per cent of GNI from 2013, but in that context we must make sure that the money is well spent. A new independent commission on aid impact will assess all ODA spending, and DfID in particular will protect all UK aid from corruption by assessing risks and using safeguards to prevent the misuse of funds.
Lord Barnett
My Lords, in the spending review, the Chancellor agreed to maintain the spending on the Barnett formula, thus rejecting the serious recommendations of a powerful Select Committee of your Lordships' House, chaired by my noble friend Lord Richard, a former Leader of the House, and including a former Chancellor in the noble Lord, Lord Lawson, and two former Secretaries of State for Scotland in the noble Lords, Lord Forsyth of Drumlean and Lord Lang. He rejected all that, and surely it could not have been on the grounds of value for money. Would the noble Lord care to tell us what the grounds were?
Lord Sassoon
I thank the noble Lord, Lord Barnett, for reminding us of the importance of continued consideration of the pros and cons of his formula. We are talking about value for money and he asks whether it was not on the basis of value for money that we rejected these recommendations, but I think that we had better stick to value for money for this afternoon.
Lord Forsyth of Drumlean
My Lords, on the subject of value for money, can the Minister tell us what his or the Treasury’s estimate is of the difference in value for money obtained when an individual spends a pound according to their own judgment and when that pound is spent by Government when it has been taken from them in taxation?
Lord Sassoon
My Lords, the assessment cannot be done exactly in that way—but when it comes to procuring large public projects and it costs more to cancel the project than it does to complete it, that is not the sort of behaviour that most people would indulge in when spending their own money. I absolutely take my noble friend’s point that there is far too much waste in procurement in government expenditure, inherited from the previous Government, and that is not the sort of thing that any of us would do when managing our own budgets.
Lord Touhig
The Government announced £1.1 billion-worth of savings in discretionary spending, including savings in consultancy contracts. Between May and 13 August, the Government signed 50 new contracts costing £10 billion with consultants. The National Audit Office has said that this is not value for money. Indeed, it said that the Government,
“lacks the information, skills and strategies to manage”,
these contracts. What is the Government’s response to the National Audit Office?
Lord Sassoon
My Lords, shortly after coming into office we cancelled £6 billion of in-year expenditure. That is the sort of rigorous approach that we will take, not only to inherited expenditure but to the management of all new contracts.
Lord Eatwell
My Lords, is the Minister’s commitment to value for money and fairness not truly incredible when the Government are cheerfully imposing larger penalties on families with children than they are on the banks?
Lord Sassoon
My Lords, we have introduced a fairness premium worth over £7.2 billion to support the poorest children in this spending review, and I think that that speaks for itself.
Public Expenditure: Members of Parliament
(14 years ago)
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Lord Grocott
To ask Her Majesty’s Government what would be the net cost implications for public expenditure of reducing the number of MPs to 600 and introducing 300 directly elected Members into the House of Lords.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, it is difficult to attribute the exact savings from having 50 fewer MPs.
Lord McNally
Our best estimate is £12.2 million annually, subject to decisions made by the Independent Parliamentary Standards Authority. Estimates on Lords costs will be given when the House of Lords reform Bill is published.
Lord Grocott
I am at least grateful to the Minister for enabling me to win my bet, which was that he would not answer the Question. I suggest that he looks at it like this. Will he confirm that on 5 July, his leader, the Deputy Prime Minister, said that the savings from reducing the number of MPs by 50 would be £12 million a year? Introducing 300 directly elected Members of the House of Lords, who of course would have much bigger constituencies, must therefore be at least six times that, at £72 million. Maybe the Minister’s departmental computer could confirm that that would mean a net cost of £60 million. At a time when the Government are looking for any possible cuts in public expenditure that they can find, and given that none of these reforms have any support among anyone out in the real world, why does the Minister not do the common-sense thing, save the money and scrap the lot?
Lord McNally
My Lords, I am rather hurt by the assertion that I did not answer the Question. The noble Lord has confirmed what my noble friend said in another place; that the cost for 50 MPs would be about £12 million. That is half the Question answered; that is five out of 10—a lot better than I used to do in some exams. On the second half of the Question, where the noble Lord is giving numbers for a reformed House of Lords and calculating on his own bases, we will have to wait for the Bill. He and I will then make calculations and be able to assess the cost. I am not in a position to answer both halves of the Question at this moment.
Lord Tyler
My Lords, does my noble friend recall that the previous Administration published a White Paper that had a section on costs for the House of Lords? The noble Lord, Lord Grocott, was a distinguished member of that Administration. Does my noble friend also recall that that Administration then had no economies to suggest for the House of Commons, and does he agree that the coalition is at least making a bid to find a reasonable equation?
Lord McNally
My Lords, I must say that the quality of the questions coming from the Liberal Democrat Benches today is extremely high. I am grateful for that question. I had forgotten that the previous Labour Government had done some costings; when I leave the Chamber, I will go and look at those costings and send them on to the noble Lord, Lord Grocott. That gives me an opportunity to say that the White Paper was partly the work of Mr Jack Straw, who, sadly, has moved from the Joint Committee because he has returned to the Back Benches. The quality of the Bill that is produced for this House in due course will owe much to the work done by Mr Straw, including his calculations on costs.
Lord Boston of Faversham
My Lords, does the Minister agree that the cost of reducing membership of the House of Commons by any number would be worth paying? Does he also agree that the cost of providing 300 directly elected Members of your Lordships’ House would not be worth paying?
Lord McNally
These are judgments that Parliament will make in due course. The argument for reducing to 600 has been well discussed at the other end of the Corridor and has been moving with all due speed. We will shortly have the opportunity to debate these issues ourselves.
Lord Campbell of Alloway
My Lords, does this Question not pre-empt the decision of this House as to whether it will retain an appointed Chamber? Is it really possible to consider this, which is a matter of cost, when retention of the Chamber as constituted is a matter of quality of advice to the nation?
Lord McNally
My Lords, I agree with my noble friend. One of the problems with the persistence of the noble Lord, Lord Grocott, in putting these Questions on the Order Paper, is that much of this is idle speculation by him. We will soon have the Bill and then we can have a proper debate.
Lord Howarth of Newport
My Lords, would not such a reduction in the number of Members of the House of Commons have larger and dangerous implications for the control of public expenditure? With the payroll vote being a yet larger proportion of its Membership, would not the freedom of the House of Commons to scrutinise the Government’s proposals for public expenditure, and its capacity to hold the Government to account for their performance over public expenditure, be enfeebled even beyond its present inadequacy?
Lord McNally
In responding seriously, I honestly do not think that this is a numbers game. I agree with the noble Lord that, whatever reforms are carried out at this end, the House of Commons should also sharpen up its act in holding the Executive to account.
Small Businesses: Invoice Payments
Lord Harrison
To ask Her Majesty’s Government what steps they are taking to promote prompt payment of invoices to small businesses by public sector organisations and within the private sector.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Government are working in partnership with business and finance bodies to challenge the long-standing culture of late payment. Our strategy encompasses three key aims: equipping suppliers with the support and guidance they need to better manage their customer relationships, invoicing arrangements and cash-flow management; establishing the public sector as a payment exemplar; and identifying and promoting private sector exemplars.
Lord Harrison
My Lords, given that one in three small firms has to wait 40 days beyond the agreed payment periods to receive an average £38,000 in late payment from Government, public bodies and larger firms, will the noble Baroness study some of the solutions offered by the Federation of Small Businesses? These include having a social clause, which would oblige contractors to pay subcontractors as swiftly as they are themselves paid by Government. She knows very well that small firms worry about obliging larger firms to comply with the late payment Act because they think they will not get future contracts. Secondly, will the Minister enforce the Companies Act 1985 and ensure that Companies House has the wherewithal to name, shame and fine the regular violators of late payment law, which so frustrate our small businesses at a time of financial downturn?
Baroness Wilcox
I thank the noble Lord for the question and the recognition that I come from a small-business background. Therefore, I know what it is like to try to get your invoices through. I have to admit that some of the research that we have done shows us that an awful lot of small businesses are so keen to get a contract—I know because I have done it in my time—that they do not read the small print and produce their invoices in exactly the way that a particular company wants to receive them. There is then an easy mechanism for them to say that the invoice is not suitable for payment. The Federation of Small Businesses, which the noble Lord cited, is well known to the ministry for business and meets regularly with us to help us develop and enforce the prompt payment code. More than 1,000 companies have signed up to that, some as big as Tesco and some as small as Mr Andrews, the plumber in my village of St Mawes.
Lord Razzall
My Lords, does the Minister recognise that the previous Government produced an initiative in the public sector under which invoices were to be paid in 10 days, which was intended to be specifically beneficial to the SME sector? Does she accept that this was typical of so many Labour Party initiatives, in that it was more honoured in the breach than the observance?
Baroness Wilcox
I think that we have moved past the time of saying too many bad things about the previous Administration.
Baroness Wilcox
Well, I have. My job is to move us on, make sure that we get business for Britain and use mechanisms that really work. We have a system for the public sector whereby the big central government departments pay within five days’ sight of an invoice. By so paying our big suppliers—at the minute, we are paying 90 per cent of them that way—we are encouraging them to pay the small companies supplying them within the 10 or 30 days that they have arranged, so we are trying our best.
Lord Campbell-Savours
My Lords, what about the recommendation of Sir Philip Green? He said that the Government should delay paying business bills.
Baroness Wilcox
Did the noble Lord say “delay paying public bills”? I am very sorry. Gosh—there we are. I shall go back and check that.
Baroness Gardner of Parkes
My Lords, is the Minister aware that many payments to small businesses are made by private individuals and that the transfer of money by direct bank payment is still very bad in this country, which causes delays in businesses receiving the money? Over the years, we have been told repeatedly that banks will be encouraged to transmit the money more rapidly, given that it is taken out of your account immediately but does not reach the other party for three or four days. Will the Minister encourage the banks to speed up this payment process?
Baroness Wilcox
Ensuring that banks keep things flowing for business is a long-standing issue. It is very important to ensure that the banks do everything they can in that regard, and for us to ensure that we provide the freedom and flexibility to enable businesses in this country to maintain the business flow which is badly needed right now.
Lord Tomlinson
Bearing in mind the earlier Question answered by the noble Lord, Lord Sassoon, does the noble Baroness think that it represents value for money to have Sir Philip Green produce a report for Government of which Government do not seem to be aware?
Baroness Wilcox
I do not really think I ought to answer questions that were directed at my noble friend.
Lord Swinfen
My Lords, is there not a statutory right to charge interest on late payment of invoices, and after what period does this come into effect?
Baroness Wilcox
Is there a statutory right? I shall have to come back to that in order to be sure.
Lord Jones of Birmingham
I should be grateful if the Minister dealt with the second part of the question. Legislation was brought in to ensure that the major contractor gets paid quickly. However, although he is holding on to the money, that contractor does not pay a small business—that was the second part of the question—and small businesses across the land get caught with this every day. I should welcome an answer to that.
Baroness Wilcox
I agree. Previous legislation brought in the five-day payment. I must say that when I looked through these questions and saw that we were paying within five days, and then saw that some of the contractors further down the line were contracting to pay within 30 days, I asked myself, “Where is that money going for those 25 days?”.
Lord Triesman
My Lords, I do not want to make the noble Baroness’s life more difficult and I appreciate what she said about Sir Philip, but I wonder whether an entirely novel inspiration might have flowed from the question. Will the Government consider using Sir Philip Green’s proposals the reverse way round and use the extraordinary leverage that Government plainly have to make sure that they and everyone else pay their bills on time to help small businesses? If that leverage counts, make it count.
Baroness Wilcox
I think the answer is that we should pay when payment is due.
Health: Spending Review 2010
(14 years ago)
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Baroness Thornton
To ask Her Majesty’s Government whether, in the light of Spending Review 2010, they will meet the commitment to free prescriptions for people with long-term conditions, the right to one-to-one nursing for cancer patients and the target of a one-week wait for cancer diagnostics.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, following the spending review, some of the programmes announced but not implemented by the previous Government will not be taken forward. We will, however, explore options for creating a fairer system of prescription charges and exemptions, taking into account the financial context. We are committed to improving early diagnosis of cancer and to ensuring that cancer patients have the care and support they need. Our updated cancer strategy, published later this winter, will set out the future direction for cancer care.
Baroness Thornton
I thank the noble Earl for that Answer, which goes some part, but not definitively, towards answering my Question. According to the Conservative Government’s own figures, waiting lists to detect cancer and other serious conditions have almost doubled since Andrew Lansley scrapped the 18-week target and other targets. We know that the quicker cancer can be detected, the better the likely outcomes. How does the Minister justify this growth in waiting lists, made worse by the CSR, and what do the Government intend to do to get back to a situation of reduced and reducing waiting lists that previously existed during the Labour Government? How long does the Minister think that that will take?
Earl Howe
My Lords, the noble Baroness is completely misinformed and wrong. The Government have not scrapped the cancer waiting time standards. Therefore, the figures that she referred to can have no bearing on the scrapping of the 18-week target, which is quite separate. People with suspected cancer will still benefit from the two-week waiting time target. That is clinically underpinned and we are keeping it. The statistics for those waiting for diagnosis on cancer are down very sharply over the longer term. There are, of course, fluctuations from quarter to quarter. The median waiting time at the moment is just under two weeks, and 95.5 per cent of people are seen within two weeks. That is an acceptable figure, although we of course maintain a close watch on the trends.
Lord Walton of Detchant
My Lords, part of the Question refers to the exemption of prescription charges for people suffering from long-term conditions. In my professional capacity as a neurologist, I looked after many such patients. Is the noble Earl aware that, as a result of recent research in molecular biology and genetics, many people with previously incurable conditions which are genetically determined are facing the prospect of drugs becoming available to treat their condition—so-called orphan or ultra-orphan drugs? Because these drugs need to be taken on a long-term basis, can we have an assurance that, as they come on stream, they will be made available to patients who will then be exempted from prescription charges when receiving this kind of treatment?
Earl Howe
The noble Lord raises two issues: access to new medicines for sufferers from cancers, particularly rarer cancers; and prescription charges. On the first, he will know that we have already created a cancer drugs fund to enable those people who cannot access cancer drugs to apply for funding for those drugs. That was part of the spending review announcement made last week. On the issue of prescription charges, we are looking for ways to make the system fairer than it is at the moment. We have not implemented the previous Government's plan to exempt all people with chronic conditions. Frankly, it was not affordable in the current context. However, we are looking at other means of creating fairness in the system.
Lord Naseby
Is my noble friend aware how important it was that he re-emphasised that there had been absolutely no change in the targets for dealing with cancer patients? Is it not surprising to him that the opposition spokesman was not aware of that fact? If we are to have a further report before the end of the year, will it include a review of NICE’s attitude to all cancer drugs, and of their availability to NHS patients?
Earl Howe
My Lords, we believe that there is a long-term role for NICE, not least in the area of assessing the clinical effectiveness of drugs. In the longer term, we believe that the problem that my noble friend identifies can be addressed more satisfactorily by a system of value-based pricing for medicines, which will mean that the price of a medicine will reflect its value to the patient, as assessed. That is a longer-term exercise that we cannot bring in in a hurry, but we are extremely conscious of the problem that my noble friend alludes to. Having said that, I stress that NICE will remain at the centre of our plans to roll out quality in the NHS.
Lord Wills
My Lords, the Minister has just accepted that early diagnosis is key to the survival rates for cancer. Can he confirm that his Government is indeed scrapping the Labour Government's commitment to reduce to one week the wait time for test results for cancer? If he can confirm that, does he seriously believe that extending the prescribed time for diagnosis results is going to help the health outcomes of those living with cancer?
Earl Howe
My Lords, there is no question but that timely diagnosis of cancer is extremely important. I do not think that anyone would argue with that. However, we believe that there may be more cost-effective ways of improving access to diagnosis than just imposing a blanket prescription—which, incidentally, has a very high price tag attached. The spending review settlement includes funding for improving early diagnosis in the context of the cancer reform strategy that we are reviewing, and we will set out our plans on that in more detail later in the year.
Intelligence and Security Committee
(14 years ago)
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Lord Strathclyde
That this House approves the nomination of Lord Butler of Brockwell as a member of the Intelligence and Security Committee.
Arrangement of Business
Lord De Mauley
My Lords, immediately after the Second Reading of the Superannuation Bill, my noble friend Lord Attlee will repeat a Statement on investment in highway and local transport schemes.
Superannuation Bill
Lord Wallace of Saltaire
My Lords, the Bill is an important step in implementing the coalition programme for government, which set out a commitment to,
“reform the Civil Service Compensation Scheme to bring it into line with practice in the private sector”.
The Government’s intention is to put in place a scheme, following consultation with the Civil Service unions, that is affordable and that not only is fair to civil servants but can be justified to taxpayers at a time of severe economic hardship. Noble Lords will be aware that this follows closely what the previous Government had intended to do, so I hope that there will be a certain measure of support from the Benches opposite. Indeed, in March 2009, the then Prime Minister, Gordon Brown, announced an intention to reform the existing arrangements in order to control costs and to improve departmental accountability. He said:
“The Government therefore intend fundamentally to reform the severance and early retirement terms for all civil servants in order to control costs. The current arrangements have been in place since 1987 and are inflexible and expensive. The new terms require departments to reduce costs and will improve accountability and value for money for the taxpayer, saving up to £500 million over the next three years”.—[Official Report, Commons, 31/3/09; col. 60WS.]
It may help your Lordships if I set out some of the background to compensation schemes in the Civil Service which we are now hoping to reform. The first legislation to cover the possibility of payment of compensation to civil servants on the loss of office was created under the Superannuation Act 1859. This Act did not create a right to compensation but it did create a framework under which such payments could be made. The Superannuation Act 1965 consolidated the previous superannuation Acts. It included a provision for the early payment of pensions to those aged 50 or more who had been asked to take early retirement in the interests of efficiency. The 1965 Act repeated the provision of a much earlier Superannuation Act—the first one, of 1834—under which authority to pay pensions to civil servants was granted for the first time. It also spelt out that civil servants had no legal entitlement to the benefits. The 1965 Act was supplemented by an administrative code, which set out the payments that a civil servant could expect but also made it clear that there was no legal entitlement to such payments.
Alongside the Fulton committee review of the position of civil servants, the Joint Superannuation Committee of the National Whitley Council was set up in 1968 to review the provisions of the 1965 Act. It reported in February 1972 that improvements were needed for the superannuation scheme,
“to restore to the Civil Service the position it had traditionally held as one of the leaders in pension practice”.
This view was reflected in the Superannuation Act 1972, which granted civil servants rights to their pensions.
I think that it is worth noting here that, unlike a pension, which all civil servants hope to enjoy in their retirement, the provisions for compensation were intended for use only in exceptional and very specific circumstances and that the vast majority of civil servants neither wanted nor expected to benefit from them.
The compensation scheme was amended in 1987 to its current form, which has lasted for over 20 years. However, by 2008 it had become increasingly clear that this scheme would no longer be sustainable when compared with equivalent schemes in the private sector. Indeed, public sector schemes had then become more generous than those in the private sector. Reform became even more urgent when it became clear that cuts in public expenditure were bound to lead to an increase in public sector job losses. Accordingly, with all-party support, in the summer of 2008 Ministers of the previous Government embarked on lengthy negotiations to reform the compensation scheme. The previous Government’s negotiations led to a new scheme, which was still generous compared with schemes in the private sector and most of the rest of the public sector. That new scheme was finally agreed after 18 months of discussions with five of the six main Civil Service unions in February 2010.
Ministers then took the view that, notwithstanding the failure to achieve agreement with one of the unions—the Public and Commercial Services Union, or PCS—the scheme should be reformed. Accordingly, the previous Government laid the necessary order to give effect to the reformed scheme as from April 2010. The PCS, without the support of the other five unions, sought a judicial review. It succeeded in obtaining an order to quash the February scheme on the basis that the previous Government had failed to get the agreement of all six of the Civil Service unions. This was because the Superannuation Act 1972 requires not only consultation but the agreement of the unions concerned to any reduction in benefits where those benefits are calculated by reference to service already rendered. Therefore, the PCS had in effect exercised a veto on the previous Government’s reforms.
That position cannot continue, which is why, in Clause 1 of the Bill, we are introducing provisions to remove the requirement in Section 2(3) of the Superannuation Act 1972 to obtain the consent of Civil Service trade unions to any changes that would lead to a reduction in benefits offered under the Civil Service Compensation Scheme. We cannot operate in a position where a single union can block any change, however reasonable that change may be. However, this does not mean that we will not consult fully with the unions, as we are continuing to do day by day at present. As was offered in another place by my right honourable friend the Minister for the Cabinet Office, I can give a commitment today to look at how we might amend Clause 1 of the Bill in Committee so as to write into the Bill a requirement for meaningful consultation with the unions.
The coalition Government’s view, which was accepted on all sides in the Commons when this Bill was under consideration there and which was the view of the previous Labour Government, is that the current compensation scheme is unaffordable and unsustainable. It allows for payments of up to three times annual salary or, for older workers, enhancements to pension and lump sum payments costing more than five times salary. For some, those payments can total as much as six years and eight months’ salary. This compares to a maximum for statutory redundancy of 30 weeks’ pay with a weekly cap of £380.
Noble Lords will have seen a number of stories in the press headlining what enormous sums the highest paid might receive if taking redundancy and estimates of the very significant costs to the Exchequer of redundancies to higher-paid officials under the current scheme. The level of payments would be excessive even if we were not facing such a difficult financial situation. To maintain the current scheme would simply be unfair and unacceptable to the vast majority of ordinary taxpayers. It is also unfair to lower-paid civil servants. The effect of the current scheme is that it is prohibitively expensive to make redundant civil servants who are highly paid and long serving. The result, therefore, is that when money has to be saved through reducing headcount, the burden tends to fall disproportionately on the lower paid, more of whom will lose their jobs than is necessary or desirable.
That is why Clause 2 of the Bill introduces limits on the benefits that can be provided under the Civil Service Compensation Scheme. Clause 2(2) imposes a cap of 12 months’ salary in cases of compulsory severance and 15 months’ salary in cases of voluntary severance. My right honourable friend made it clear, during debates in another place, that these caps, as set out, are a blunt instrument. He is right, because the caps at Clause 2 are not intended to be the last word. It still remains the coalition Government’s intention to reform the scheme by negotiated agreement rather than by relying on an imposed cap. However, the caps are necessary so that we do not fall into the trap that faced the previous Government of trying to negotiate a reformed scheme that cannot be implemented within the foreseeable future.
The most generous terms currently available are for those aged 50 who have a significant number of years of service and who are compulsorily retired early. A large part of this cost is the enhancement to their pension. Under the Bill, rather than receiving an enhancement to their pension, such staff will now receive a cash lump sum equivalent to the appropriate cap. I emphasise that the Bill will affect only those staff who are issued with their notice or agree a departure date after the legislation comes into effect and while the caps are operating, so any civil servant who has already been issued with a redundancy notice, or receives one before the Bill passes into law, is not affected by the restrictions introduced by this Bill.
Clause 2 also provides definitions to clarify who is covered by the compulsory cap and who is covered by the cap on voluntary departures. Clause 3 provides for the effects of the Bill to be time limited. We have no desire to see this legislation continue any longer than is absolutely necessary. Inclusion of a sunset provision prevents the legislation from continuing ever onwards. Instead, if we wish to renew it, the Government would be obliged to return to it.
Alongside the provision for prolonging the effects of Clause 2, there is also an option to bring forward its termination date. Our firm intention is to resolve this issue by discussion rather than legislation and, provided that that is possible, we will then make the order that repeals what will be Section 2 of the Act.
We are close to getting a negotiated agreement. My right honourable friend the Minister for the Cabinet Office announced on 7 October that the Government had concluded negotiations with five of the Civil Service unions on a new Civil Service Compensation Scheme. The new scheme would offer significant extra protection for lower-paid staff and for those with long service who are close to retirement. As part of the Government’s commitment to fairness, it would also limit the maximum payments to the highest earners.
Key measures of that proposed new scheme include, first, a standard tariff, where each year of service provides one month’s salary in the event of redundancy. The tariff would be capped at 12 months for compulsory redundancy and 21 months for voluntary redundancy. The other key measures are, secondly, that all civil servants who are made redundant—voluntarily or compulsorily—would be entitled to a three-month notice period; thirdly, that there would be significant protection for lower-paid civil servants, so that any civil servant earning less than £23,000 who is made redundant would be deemed to earn that amount—that is to say, £23,000—when their redundancy payment was calculated; fourthly, that payments to the higher paid would be limited, so that staff earning more than six times the private sector median average earnings—currently just short of £150,000—would have their salary capped at this figure for the purpose of calculating their redundancy payment; and, finally, that staff who have reached minimum pension age may be able to opt for early payment of pension when they leave, in return for surrendering the appropriate amount of any redundancy payment.
This offer is a good one and we seriously hope that it will still be possible to secure the agreement of the sixth Civil Service union, the PCS. However, should this not be so, the Bill will mean that the Government and the country will not be subject to an indefinite veto over the reform of this scheme.
I can confirm to the House that a delegated powers memorandum on the Bill has been submitted to the Delegated Powers and Regulatory Reform Committee. Also, my right honourable friend the Minister for the Cabinet Office has written to the Joint Committee on Human Rights about the reasons why we believe that this Bill is in line with the United Kingdom’s human rights obligations. I look forward to reading any comments that these committees may have to make on the Bill.
Finally, and to avoid any doubt, I want to underline that this is not in any way an attack on the principles that govern the British Civil Service. The Government believe in the continuation of the British system of a permanent and non-political Civil Service, with its values of integrity, honesty and impartiality and with open recruitment and advancement on merit. These values are as much to be cherished and nurtured today as ever.
I shall now listen with great interest to the points that noble Lords have to make both on the Bill and on the practical implementation of the scheme. The Government are convinced that reform of the Civil Service Compensation Scheme is in the national interest and the interests of the British economy and I earnestly hope that a successful negotiation will render the provisions in Clause 2 unnecessary. That is the coalition Government’s aim and I will do all that I can to help to deliver it by guiding this Bill through your Lordships’ House. I commend the Bill to the House.
Lord McKenzie of Luton
My Lords, I start by thanking the Minister for his explanation of this short Bill and some of the history associated with the compensation scheme and for his courtesy in facilitating meetings yesterday, which I found very helpful.
Despite its brevity, the Bill has the potential to impact the lives and aspirations of many. We approach it in a constructive manner that recognises the sensitivity of the issues that it is intended to address through the reform of the Civil Service Compensation Scheme. The Government have said that they put great stock in wanting to reach a negotiated settlement, and there was indeed a consensus in the other place that that would be the right course of action. However, it is our duty, in seeking to improve the Bill, to ensure that it reaches the statute book in a way that is practical, fair and in the long-term interests of the country.
Let me be clear: we agree that the current arrangements are in need of reform. That is why in February this year, when still in government, we brought forward proposals that would have saved £500 million over three years, protected the lowest paid, tackled the disproportionate settlements for some very highly paid people and ensured that the terms were not age discriminatory. Those proposals were underpinned by extensive negotiations with the trade unions concerned, five of which were in agreement but one of which—I refer to PCS, which represents the largest number of civil servants—was not. There followed, as has been set out by the Minister, a judicial review and the quashing of the reformed arrangements.
We accept that the position would have had to have been addressed by any incoming Government, but before commenting on how this Government have responded we might just reflect on the context in which these matters must be considered. We know that the Treasury predicts half a million public sector job losses over the CSR period. Of course, not all of those will be Civil Service jobs, but perhaps the Minister will update us on his latest estimates of how many will be. With PricewaterhouseCoopers predicting half a million private sector job losses caused by the spending cuts, the British Chamber of Commerce expecting unemployment to rise for the next two years and the CIPD forecasting that unemployment will not fall below 2010 levels for the whole of this Parliament, there will be a difficult alternative employment market for many civil servants who lose their jobs.
Being fair to those who lose their jobs is paramount. We must be fair not only in terms of compensation and pensions but in the support that individuals receive when they leave the service. Evidence given to the Committee in another place gave testament to how, through a range of sophisticated techniques—including redeployment, reskilling and, of course, good quality voluntary redundancy schemes—the service has successfully managed a headcount reduction of more than 80,000 over recent years. Fairness means ensuring a credible bridging policy for those individuals affected by the Government's cuts. The Minister's press release prematurely announcing the conclusion of negotiations with the trade unions also refers to significant changes that are planned to shorten the process for making staff redundant. Can the Minister confirm that, the CSR and the press release notwithstanding, the same levels and quality of support will be available for those who will depart the service over the next four years?
There is a perception that civil servants cope with such things because they are all on large salaries and feather-bedded pensions. This perception is false and is often fuelled by untypical examples that arise in the public sector at large being extrapolated to suggest that those examples are the norm. The reality is that pay in the Civil Service is substantially below that of the private sector or other parts of the public sector. The median salary is around £22,000 per year, with 40 per cent of civil servants paid less than £20,000 per year. For these people, enhanced protection for redundancy formed part of a package, which helped to ensure reasonable levels of job security and made it more palatable to accept lower levels of pay. At Second Reading in another place, the Minister himself referred to the great myth that all civil servants are highly paid.
We should also be mindful of the hugely important part that the Civil Service plays in our national life. Its professionalism and integrity make the process of government work. Through its commitment and work, government continues to function normally even during the heady periods of the electoral cycle and changes of political Administration. The Minister now has first-hand experience of that.
I turn to the specifics. As we have heard, the Bill has three clauses, and in their current form we have difficulties with each of them. Clause 1 was a rather rushed addition that the Government introduced late in the proceedings of the other place and that no one, including the Government, appears to be wholly satisfied with. The clause proposes to remove the statutory requirement on the Government to have the agreement of the Civil Service unions before decreasing any compensation benefits. The clause will amend Section 2 of the Superannuation Act 1972.
The trade unions are understandably concerned that, if the Bill is passed as drafted, their ability to engage meaningfully in negotiations will be undermined. In its current form, we cannot support that provision. We accept that, where a serious and concerted effort to reach agreement has failed, the Government should ultimately be able to compel a settlement. However, such a right should be exercised only on the basis of clear, systematic, open and proper negotiations with the workforce and its recognised trade unions, and the process should be reported to Parliament, which should be the arbiter of whether the process is fair and transparent.
We understand and have heard that the Government have committed to redrafting Clause 1 in consultation with the trade unions. The wording of any such amendment will be critical, so we will look at it in detail when it is introduced. We will be particularly interested in whether it incorporates natural justice elements and enables due process for consultation. We look forward to seeing the Government’s amendment in due course and to having sufficient time to consider its implications.
Clause 2 has been controversial from its introduction. It proposes to introduce a crude capping mechanism by placing a maximum amount of compensation payable to civil servants—12 months for compulsory redundancies and 15 months for voluntary redundancies. If implemented, that would produce dramatically worse outcomes for many civil servants in comparison with the existing scheme and the February 2010 scheme. Compared with existing arrangements, some civil servants could lose two-thirds of their current entitlement. That is particularly unfair to longer-serving individuals, given that current arrangements are based on years of service.
Those caps are punitive, unfair and unworkable. They were put forward without any consultation, have led to mistrust and have created real concerns among staff. It is clear from the evidence provided by the trade unions that the inclusion of the caps in the Bill was not helpful in creating a climate for negotiations and was demoralising for staff who see themselves assailed by redundancies, proposed extra costs of pensions and freezes on pay.
The Cabinet Office Minister referred to the caps—this has been repeated today—as a bit of a blunt instrument, which he recognised cannot represent a comprehensive, sustainable scheme. He stressed the importance of a negotiated settlement with greater protection for the low paid and caps on payments for the highest paid. If the Government do not see the caps in Clause 2 as a sustainable basis for maintaining the compensation arrangements, why introduce such caps, especially given that Clause 1 now gives the Minister the power ultimately to impose modifications to the scheme without agreement? The purpose of the caps is now redundant. If the Minister does not ultimately need agreement for changes to the scheme, as proposed in Clause 1, one has to ask why the caps should be retained.
As we have heard, things have moved on and an agreement has been reached with four or perhaps five of the Civil Service trade unions—including Prospect, FDA, Unite and GMB—which the Minister is minded to implement under the provisions of Clause 1, immediately following the entry into force of the Bill. As we have also heard, Clause 3 permits the Minister for the Civil Service to repeal Section 2 by order. If we are not able to convince noble Lords to seek the removal of the Clause 2 caps during the passage of the Bill, we might be comforted that it is planned to repeal the provision as soon as the Bill is passed. I think that the Minister earlier confirmed that that is the intention and that that will definitely happen.
Clause 3 also contains a sunset provision, so that while Clause 2 will otherwise expire at the end of 12 months unless earlier repealed by an order, it can also be either extended for a period of six months or, bizarrely, revived for six months following its expiry or repeal. Having been laid to rest, it can be brought back from the dead—it was rather aptly coined the “zombie clause” in the other place—so the effect is that the clause will be a continuing threat to those who might challenge the arrangements that the Minister will implement.
Like zombies, zombie clauses are not common—one of the few examples relates to emergency terrorist legislation—so can the Government explain why such a measure is now necessary and appropriate? If the Minister is not confident that the amended scheme that he has negotiated is secure, whether in its dealing with accrued rights or proper consultation, he should seek to amend it. To hold in reserve draconian caps as a continuing threat to the workforce, on the pretext that someone might challenge the amended scheme, is, frankly, unacceptable. The Clause 2 caps must not be a default position for the scheme. With the assurance of the Minister that Clause 2 is to be repealed the day after the Bill becomes law, we will seek to have the provisions that allow for the revival of the clause to be removed from the Bill.
We welcome the Government’s commitment to draft amendments to reinforce the obligation to consult and to make the process more transparent. We hope that those amendments will allay our concerns, and we look forward to the opportunity to consider them during the passage of the Bill. Like removal of the right to revive Clause 2, progress on an amendment to address Clause 1 would help to redress some of the fears which have been created during the process surrounding the Bill because of the arbitrary caps, the premature announcement of an agreement and the move to impose a scheme.
We have heard today an update from the Minister on negotiations with the trade unions and the extent to which agreement has been reached. Our preference would have been to see the February 2010 proposals as the starting point for an updated scheme, but this is not where we are now. The agreement being advanced is in some respects a less generous package, but we acknowledge that it contains improved protections for the low paid, which we support. The Minister, it is to be hoped, will be able to confirm that it addresses, in so far as it is considered relevant, the issues of accrued rights and the Human Rights Act.
It is not the most comfortable position to have to proceed without agreement with all the trade unions. It is to be hoped that there is a chance yet for all six to be part of a negotiated way forward, but we are under no illusions about how difficult this would be. The Government could yet contribute to that end by removing from the legislation the Clause 2 caps and by ameliorating its approach to imposing a scheme. We hope that they will do so and that we will ultimately be able to support the Bill.
Baroness Noakes
My Lords, it is a pleasure to follow the noble Lord, Lord McKenzie. It was good to hear the support of the Benches opposite for what the Government are trying to achieve in the Bill.
Last week my right honourable friend the Chancellor of the Exchequer set out the outcome of his spending review. The message could not have been more stark: 13 years of Labour government have left the economy of this country on its knees. Our Government are now taking some painful but necessary steps in order to restrain public expenditure. We will be able to begin the long road back to a healthy economy once the budget deficit is eliminated, and that requires the tough action set out by the Chancellor. Even then we will not get back to the economic health that existed when we left government in 1997, and no one should be in any doubt that the expenditure cuts are in any way optional.
The decisions that follow from the need to cut public expenditure may seem harsh to those in the public sector, but private sector businesses face these kinds of decisions all the time. Businesses constantly have to adapt their costs to meet market imperatives, whether caused by recessions or changing markets, and they often have to resort to redundancy programmes. What the public sector is now confronting is not an unusual phenomenon.
The Office for Budget Responsibility estimated in June that nearly half a million jobs would be lost in the public sector. According to the Office for National Statistics, public sector employment was just short of 6.1 million earlier this year. That means that the loss of jobs in the public sector will be around 8 per cent. Reductions of this scale may well feel huge in the public sector—and there will be areas where the percentages will be larger than the average—but private sector efficiency programmes have had to handle much worse than this.
It should not be a big surprise to the public sector that there will be reductions in jobs. In the past 13 years, a disproportionate share of employment growth in the UK has been in the public sector. A report earlier this year from Manchester University’s Centre for Research on Socio-Cultural Change estimated that in the 10 years after 1997, 57 per cent of the jobs which were created were either in the public sector or were funded by the state. The public sector picture has been one of a relentless rise in employment.
I mentioned that the current figure is around 6.1 million. When the previous Government came into power, the figure was 5.2 million directly classified to the public sector. Even if we exclude the nationalised banks from the current figures, the rise in public sector employment under the previous Government was 13 per cent. That rise in direct and indirect public sector employment was not sustainable on a long-term basis when it was created. Indeed, the Manchester University report to which I referred described it as an unsustainable and undisclosed business model for the UK. The courageous way in which our Government are dealing with the economy will ensure that the UK’s business model will start to revert to one which has more staying power for the future.
When reducing jobs in the public sector, I am sure that the Government will look first to the scope for natural wastage to play a part. As I understand it, retirement and other natural wastage runs at a rate of around 8 per cent each year in the public sector, which is not far adrift from the total reductions required as a consequence of the spending review. But of course life is never that simple; natural wastage rarely does the full job, and some tougher action by way of redundancy will inevitably be required. That brings me to the Bill, the aims of which I completely support.
The plain fact is that the current redundancy scheme operating for the Civil Service is too generous by a country mile. It allows some individuals, as we have heard from the Minister, to take more than six years’ pay when they leave. That means that if the Government wish to remove jobs by way of redundancy, the net cost savings achieved might be deferred until the seventh year after the redundancy. That is a personnel policy for the madhouse.
Those of us with a private sector background are simply astounded that a scheme which entails a six-plus year payback continues to exist. In the private sector, redundancy terms range from the extremely modest statutory scheme to voluntary schemes which involve higher payouts. Oral evidence given to the Public Bill Committee in another place showed that caps of two years’ pay would be the maximum in the private sector, with most companies currently reducing that maximum to nearer one year. By any comparison, the current Civil Service scheme is out of line.
Some have argued that generous pension and redundancy terms are part of an overall bargain which goes alongside pay, which is lower in the public than in the private sector. However, that argument has been largely turned on its head by an explosion in public sector pay. Again, the evidence given to the Public Bill Committee in another place showed that public sector pay was now higher than pay in the private sector at levels up to about £40,000 or £50,000 per annum, and that covers the vast majority of the Civil Service.
The Government face the economic imperative of eliminating the deficit, and the Civil Service cannot be exempt from the cuts to public expenditure which have to be made. But it is obvious that with the current redundancy terms, the Government will not realise enough by way of early benefits from Civil Service redundancy and may therefore have to make deeper cuts elsewhere in order to meet the unaffordably high transitional costs of Civil Service redundancy if the current scheme is maintained.
To be fair to the previous Government, they tried to revise the current scheme and, as we have heard, to bring in a new scheme earlier this year. Some aspects of that we still thought were too generous, but the direction of travel was right. As the Minister has explained, that deal was struck down as a result of action by the PCS union. The Government have no choice but to bring this Bill before Parliament. I am glad that the noble Lord, Lord McKenzie, acknowledged that, had his party been in power, it would have felt it necessary to bring a Bill of some kind before Parliament.
I completely support Clause 1, which has the effect of removing the need for consent to a compensation scheme. This would bring the Civil Service scheme into line with arrangements in the private sector, where redundancy terms are commonly discussed with workforce representatives, including unions, but where it is rare that an employer is absolutely required to achieve agreement. This, too, was clear from evidence given to the Public Bill Committee in another place.
Furthermore, the evidence showed that it is not regarded as good practice in the private sector to hard-wire redundancy terms into employment contracts, which is the effect of the Superannuation Act 1972. Clause 1 represents an essential modernisation of employment terms in the Civil Service. I should stress that I completely support the need for consultation and for it to be substantive and not a mere formality. I therefore welcome the Minister’s assurance that such a requirement will be placed clearly in the Bill by way of amendment in Committee.
Like the noble Lord, Lord McKenzie, I am less certain about Clauses 2 and 3. In fact, I do not understand why they are in the Bill. Clause 2 introduces caps and Clause 3 contains complicated sunrise and sunset provisions. Why are these clauses necessary given that Clause 1 removes the necessity for consent? It seems to me that these clauses amount to no more than negotiation by statute. If I am correct, that is not a good use of legislative time. The Government have said quite clearly that they are negotiating with the unions involved on the basis of a scheme which is far more generous than the limits set out in Clause 2. What is the purpose of Clauses 2 and 3 other than to act as a gun to point at the head of the unions? The noble Lord, Lord McKenzie, and I may be missing something here. If so, I hope that the Minister can explain it.
I can understand why individuals in the Civil Service see it as unfair that the current redundancy scheme is to be taken away just at the point when redundancies, both voluntary and compulsory, seem to be much more likely. But there is another aspect to fairness—for the taxpayers of this country. Why is it fair that someone in the private sector on average earnings of £25,000 a year should pay tax to fund Civil Service redundancy terms which are beyond that taxpayer’s wildest dreams? Why is it fair that our chances of restoring the health of our economy by reducing the deficit are seriously hampered by outdated and overgenerous redundancy terms?
Baroness Drake
My Lords, continuing the constructive approach adopted by my noble friend Lord McKenzie, it is understood that the Civil Service Compensation Scheme needs to be reformed to strike a fair balance between the taxpayer and the legitimate expectations of civil servants and that the Government must have authority to act on behalf of the taxpayer. But the reform needs to meet four criteria: be fair in its level of compensation consistent with the actions of a good employer; show sensitivity and understanding in the manner of its introduction; be the product of meaningful consultation and negotiation; and provide protection for the lowest paid. All these criteria are consistent with good HR practice of a good employer or large company in the private sector.
However, the Bill as drafted fails to meet those standards. In determining the process for changing the Civil Service Compensation Scheme, a process which should have integrity over the long term, it is not necessary for the Government to give themselves unbridled powers. Compelling a change should be a course of last resort not an action of first resort, which the current draft of the Bill allows and facilitates. The Bill should give clear recognition of the need to change to be preceded by meaningful consultation and negotiation. As drafted, it fails to do that. The Bill should provide for safeguards to be put in place to ensure a fair and transparent process for change to take place. As drafted, it fails to do that. Such safeguards need to strike the right balance between the powers of the Government, the involvement of Parliament and the engagement of trade unions. I fear that the Bill as currently drafted does not achieve an equitable balance. When considering Clause 1 of the Bill, I urge the Government to make it clear that proper consultation and negotiation must take place before changes are put into effect. If the Government do not explicitly support effective consultation processes in the treatment of their own civil servants, it sets a poor benchmark for other employers to follow.
Clause 2 seeks to impose caps on the level of compensation which, in my view, are punitive and unfair and far below what constitutes fair and reasonable. That is particularly so when considered against the extent of the movement from the current scheme provisions. There is no necessity for such compensation caps to be in the Bill. As the Government themselves have conceded, these caps are not intended as a long-term replacement scheme. As such, they can be interpreted only as intending to provide the Government with a negotiating tool. The very inclusion of sunrise and sunset clauses in the Bill is confirmation of that opinion. When the Bill seeks to secure the Government's authority to change the terms of the Civil Service Compensation Scheme, it is not then necessary to have these caps laid out in the Bill in the way that they are, precisely because that authority would have been secured, making those caps unnecessary. Furthermore, if those caps ever took effect, the protection offered for the lowest paid is weakened and could produce perverse incentives to select lower-paid staff for redundancy.
It is all too frequent in difficult economic circumstances to observe popular calls for scapegoats and in that vein to demonise civil servants as overprivileged and overindulged. That is unfair and unfounded. The vast majority of civil servants are hard-working, conscientious employees, who come to work to do a good job and are motivated to deliver in the interests of the citizens of this country. The efficient discharge of their functions is an essential component of our democratic structures and delivery mechanisms. Civil servants are not just a set of numbers, but ordinary people who have children to raise, rent to pay, bills to meet, and in common with many private sector workers, feel increasingly insecure about job losses and employment.
Half a million civil servants are covered by this scheme. How change to the compensation scheme is managed will influence their morale and motivation. I welcome the articulation of the Government’s commitment to meaningful consultation by the noble Lord, Lord Wallace, but urge the Government, in securing the process for and the change to the compensation scheme, clearly to recognise in the Bill itself the importance of due process, consultation and negotiation before change is effected both in the short term and over the long term, and to remove the caps, which are both unfair and unnecessary.
Lord Maclennan of Rogart
My Lords, it could never be easy to introduce a statutory scheme reducing the compensation entitlements of those leaving the Civil Service prematurely. That was manifested by the experiences of the outgoing Labour Government when their proposals for reform of the scheme under the 1972 Act were taken to the High Court and quashed. That is the immediate background against which we have to judge this Bill and recognise the difficulties that face any Government.
It is also important to reflect that the dramatic headlines about the loss of people employed in the Civil Service have concentrated the minds of those who might not otherwise be so concerned about the terms of the Bill. The previous legislation has lasted for a long time, since 1972. It was not challenged before because there was a gradual expansion rather than contraction of the numbers working in the public sector. That expansion was substantially accelerated in the lifetime of the previous Government; the contraction now envisaged will not reduce the Civil Service to the level at which it stood in 1997 when the last Labour Government took office. It is my understanding that we shall end up with 400,000 more jobs in the public sector than in 1997, notwithstanding the cuts envisaged.
It is unquestionably highly desirable in making the changes to the terms available to civil servants on premature termination of their employment that the scheme is broadly acceptable to all categories in the service and, in particular, that its provisions ensure proper protection for the lower paid. I believe that the coalition Government have recognised that that is an important condition and have moved to ameliorate the terms on offer in earlier proposals. I have listened with interest to the speeches of the noble Baroness, Lady Drake, and my noble friend Lady Noakes about the precise terms of this legislation and particularly their concerns with Clauses 2 and 3, which would be widely shared. It is not reasonable not to accept and acknowledge the substantial movement towards acceptance of a better deal than was originally proposed in the months since the Bill was published.
When changes were mooted to the current scheme by the Labour Government, five of the six unions involved in the negotiations were prepared to recommend to their members acceptance of what was proposed. That appears to be the position in respect of the proposals of the present Government. It is to be hoped that the sixth union, the PCS, will acknowledge that substantial improvements have been made in what was originally proposed. It has not as yet given any indication that I have discovered of what particular complaints it has, or what proposals it would make to amend the proposed scheme, which has been acceptable to their colleagues. It would be helpful to the Government and the legislature to have a clearer idea of what its goals are.
As for the provisions of Clause 1, it seems entirely right that no single body of employees in a union should be able to hold the country to ransom. It is entirely right that there should be requirements to ensure proper, meaningful consultation about proposed changes. I very much hope that that will appear in the Bill, and I was glad to hear my noble friend Lord Wallace give that assurance. On the other hand, pay in the private sector—and indeed in the rest of the public sector, including in the National Health Service—appears to have risen more rapidly in the past 10 years than in the Civil Service. That trend may not continue. In considering comparability between sectors, we should recognise the differential pay levels of the different sectors and the difficulties that will be faced by civil servants, made redundant, who have accepted lower levels of reward than their opposite numbers in the private sector.
It may be unusual to be considering a Bill whose terms could be amended by such sunset provisions as have been provided, but this underlines both the urgency of the situation and, I believe, the willingness of the coalition Government to negotiate. I very much hope that it will be possible to introduce the arrangements that encourage flexible voluntary redundancy arrangements in the months that lie ahead.
Redeployment within the service may not always be possible, but in the present circumstances systematic consideration should be given to it, including postponement of final service of notice, to allow public servants the best opportunity of re-employment. In April 2008, the then Government introduced protocols of the kind that I understand have been operated ever since to ensure what was called the Efficiency and Relocation Support Programme, when there were surplus staff situations. I would be grateful if the Minister would indicate that it is in no way the Government’s intention to resile from those protocols, which would help to ameliorate the difficulties faced by, admittedly, a larger number of people than were affected in spring 2008.
It is immensely important that these changes come about with the least hardship. People who are employed in parts of the country far from the capital city will not find it easy to be redeployed within the public sector, and many of them will find it exceedingly difficult, in areas of existing high unemployment, to find alternative employment in those areas. They may have to move, and for some that would constitute enormous difficulties. I hope that the maximum flexibility will be exercised in terminating employment and issuing redundancy notices.
I recognise that there has been valuable movement in the direction of easing that situation by increasing pay in lieu of notice to three months; and other changes in the proposed new scheme, such as the readier access to pension arrangements at pensionable age, are welcome and could help considerably in those respects. We await with interest the tabling of the amendments that the Government propose to see whether they themselves will contribute to the easing of the difficulties that are faced, particularly by the PCS. I profoundly hope that that will be done.
Lord Turnbull
My Lords, to the outside world it may look as though the changes proposed to the Civil Service Compensation Scheme are part and parcel of the coalition’s spending cuts. In fact, this issue has been under discussion for at least seven or eight years—long before spending cuts were mooted. Early in Labour’s second term, when I was Cabinet Secretary, the compensation scheme was identified as an issue to be addressed. This was driven by three considerations.
First, at around this time thinking on the issue of ageing was changing. The Strategy Unit had produced a seminal report drawing attention to the changing demographics. In particular, it criticised the early retirement culture in a world in which longevity was increasing rapidly. Incentivising people barely past the age of 50 to retire rather than seek other employment may have been convenient for employers, but for the economy as a whole it made no sense. It was this change in thinking that led eventually to the increase in pension age that is now proposed and the lifting of the compulsory retirement age in the Civil Service. The Civil Service Compensation Scheme is therefore a piece of unfinished business in this wider agenda.
Secondly, the arrangements for Civil Service compensation which date from 1972 were, for some categories of leavers, out of line with the rest of the public sector, massively out of line with the private sector, and bore no relation at all to the statutory scheme. There was therefore a growing sense of unfairness because taxpayers were funding a scheme for civil servants that was vastly more generous than anything they had access to.
Thirdly, too much of the compensation took the form of enhancement and earlier payment of pensions. Since these pensions came notionally from a non-existent fund, the costs were lost in the mists of the public accounts. Had the money come from a funded scheme, the drain on the fund would, I believe, have been identified much earlier and addressed.
The Government—both the previous one and this one—are right to tackle this issue. I support the Bill, albeit as a regrettable necessity made necessary by the failure to achieve a negotiated settlement. I also endorse the tactics used—that is, negotiate if possible, legislate if necessary. I hope, however, that the eventual outcome will be a negotiated settlement whose terms are close to those agreed recently with most of the Civil Service unions. That scheme is simple. It is also fair in a number of ways. It is fair between different parts of the public sector, fair between taxpayers and civil servants, and fair between the different grades of the Civil Service through the provision of the underpinning and the cap on reckonable salary levels. It reduces the extent to which pension provision is used to subsidise early retirement. It provides a premium and encouragement for voluntary rather than compulsory redundancies—rather than the other way around. It also removes the incentive to lay off lower-paid rather than higher-paid people.
There is a hard lesson here for the PCS and its approach of total resistance. If it had agreed to the terms put forward last February by the Labour Government, the coalition would have been put on the spot. Would it have allowed a negotiated agreement to stand, or would it have overturned it? Francis Maude hinted in another place that the coalition may well have let that agreement stand, since the gain then to be made would have been smaller and the resentment caused by overturning it would have been even greater. I urge the PCS to rethink its position. What is on offer in the October package is already worse than what was suggested in the February package. The PCS can go for broke and challenge the legislation. However, if it fails—and the legal advice in the various briefing notes that we have received indicates that it may well—it could end up with worse terms even than are available now, let alone last February, not just for the PCS but for the other unions in the Civil Service council. Since the underpinning means that the majority of PCS members are getting an uplift, that would be inexcusable.
Finally, there is a lesson here for the debate about public sector pensions which will follow the final report of the noble and learned Lord, Lord Hutton. The PCS could make the same mistake by trying to hang on to every aspect of the status quo and refusing to negotiate constructively, but ending up with a worse deal.
Baroness Turner of Camden
My Lords, I am unhappy about this Bill. I know, of course, that we do not oppose Second Reading in this House and I am not seeking to do that. However, I hope that the Bill will be substantially amended before it leaves us.
As the Explanatory Notes make clear, the object of the Bill is to cut payments to employees who are made redundant. It is being introduced in the wake of the spending review, when employees in the public service anxiously await news of the way in which their employment may be threatened or perhaps even terminated. In essence, as the Minister has explained, the Bill caps the amount of compensation paid to civil servants under the Civil Service Compensation Scheme to a maximum of 12 months for compulsory redundancies and 15 months for volunteers. It also removes the statutory requirement for the Government to have the agreement of the unions before decreasing any superannuation benefits.
I have been in touch with the Public and Commercial Services Union—one of the largest unions, with 300,000 members working across government departments. According to it, the Bill means that, in the event of redundancy, members working across the country will receive a vastly reduced compensation payment; some could even lose 50 per cent of the payments that they have accrued while working for the Government. According to the Explanatory Notes and to the statement made by the Minister this afternoon, an earlier attempt to amend the terms of the scheme was nullified when the union successfully brought judicial review proceedings.
I understand that there have been negotiations between the Minister and representatives of the PCS and the Prison Officers Association, the other large union involved, which has also objected to the main provisions of the Bill. An offer was made that was unacceptable, as the terms would have been detrimental to the majority of members earning more than £20,000 a year with accrued rights to two years’ service or more, although it is understood that more favourable provision was available for the very low paid. The legal advice that the union has received indicates that civil servants should continue to be entitled to accrued rights under the compensation scheme. The union states that it is anxious to secure a negotiated settlement. If no agreement is secured, the union would have to consider taking legal action, which could take many months to resolve. If the union were successful, as it could well be, the Government would be bound to adhere to the original entitlements.
As things stand, however, it looks as though the Government are intent on making many civil servants redundant without incurring the costs originally laid down as a result of collective bargaining. As a former union official, I find that unacceptable. What sort of message does that send out to many public service employees—many of them women—already worried about the future in the light of the spending review? “They want to get rid of us as cheaply as possible and they are going to tear up our agreements”, is what they will be saying—and that is the impression that will be created. The only way forward is a negotiated settlement with all the unions. As I said, we do not oppose Second Reading in this House, but we must seek to take this further in Committee.
Lord Newby
My Lords, the noble Baroness, Lady Drake, said in her excellent speech that staff in the public sector feel demonised. I have had a number of conversations with senior staff in the NHS and my experience is that they indeed feel demonised. As a former member of the public service and as an active trade unionist as a young man, I find that extremely worrying because I do not believe that it is my noble friend’s intention to demonise the public sector. Certainly, from the Government’s point of view, it would be completely foolhardy to pursue that course given that they are embarking on extraordinarily ambitious changes to the way in which we run virtually everything in this country. Therefore, it is important that civil servants feel that they are respected and taken seriously by Ministers.
However, one reason why this view is taken—in my view falsely—is that many people working in the public sector have not the faintest clue of what is happening in the rest of the world. Incidentally, it is true that many people in the private sector do not have the faintest clue of what is happening in the public sector. However, many in the public sector would be surprised to know how out of line their current redundancy terms are with those that obtain in the private sector. The typical provision, at least for compulsory redundancy, is that people receive one week’s payment for each year that they have been employed. Indeed, I am told that this is the standard that DBERR, as it was, recommended to private sector employees. That is very different from what is happening in the public sector.
Even for voluntary redundancies, as the noble Baroness, Lady Noakes, pointed out, the most generous terms in the private sector are now no better than those currently on offer from the Government—indeed, those terms are being reduced all the time. In fact, if you are made compulsorily redundant in the private sector, it is virtually impossible to get a year’s pay. You would have had to have started at 16 and still be working at 68 to qualify. The one year that has been proposed in the public sector is a level of compensation unobtainable by anyone in any circumstances in the private sector.
Many people in the public sector do not realise how differentials in pay have changed over the past 10 years. A number of noble Lords have mentioned this already, but recent IFS research shows a public sector pay premium of 2 per cent for men and 7 per cent for women, based on hourly rates. That ignores the other benefits that the public sector has in enhanced pensions and redundancy rights.
As the noble Baroness, Lady Noakes, said, over the past two to three years, in addition to making a lot of people redundant in many firms, the private sector has been adopting a range of flexible labour practices in order to keep the maximum number of employees in work, including reduced hours, frozen or reduced pay and the abolition of bonuses. That has worked to a considerable extent and unemployment in the private sector has not increased to anything like the extent that was originally envisaged.
One of the challenges for those in the public sector, including the unions, is the extent to which they can follow this practice, because surely, more than anything else at this point, they should be seeking to reduce the number of people who are made redundant and who have to leave public service. That should be the logical aim of a public sector or Civil Service leader, because the Government have imposed, in effect, a cash limit in aggregate on public sector pay. The question is what you can get for that and how best you protect people within the sector.
In local government, steps that to a certain extent replicate private sector behaviour have been taken by a number of councils. In Salford, for example, staff are being asked to work an extra hour a week for no pay—a pretty common thing in recent times in the private sector. In Stockton, refuse workers have been put on a four-day week. That kind of practice, although not desirable in an ideal world, is what we, and the Civil Service and public sector trade unions, should be looking at, instead of fighting tooth and nail, as is happening in some cases, to preserve overgenerous redundancy terms that, if they were continued in their current form, would mean only that in the medium term more people would be made redundant or the size of the Civil Service would shrink even more.
The story so far reads rather like a throwback to the industrial relations that I remember from when I worked in the Civil Service—and indeed went on strike as a civil servant. The Government produced proposals—in this case on redundancy payments—that were still, by private sector standards, extremely generous. The PCS went to court and won. The negotiations dragged on beyond the election, so we now have a situation, not surprisingly, in which a new Government, in worse economic circumstances, find themselves offering less propitious terms than were available earlier in the year. It is a classic case of a union biting off its nose to spite its face. As the noble Lord, Lord Turnbull, said, if the deal offered earlier this year had been in place, it is highly unlikely that the coalition would have sought to overturn it.
Now the question is: what alternative do the Government have to the current proposals? A settlement is urgently needed. Without it, more civil servants will undoubtedly lose their jobs. I am a great believer in negotiations and would have hoped that it was possible to get them in this case, but I, too, have read the PCS briefing, which says:
“In considering the offer, the test PCS used has been a practical one—how many of our members, particularly the lower-paid—are protected by the proposals. The last scheme, with an underpin of £60,000 and a cap of two years, was rejected as our estimate was that it only protected 50% of our members”.
The implication of that statement is that any scheme that has any detrimental effect on a significant number of PCS members will be rejected by the PCS. However, I am afraid that if it does not have a detrimental effect, there is no point in changing the scheme. The attitude exemplified in that brief means that the Government have no option but to proceed broadly as they are doing.
I hope, of course, that the maximum amount of consultation and negotiation will take place; indeed, I think that the Government are committed to that. I also have difficulties with the sunset clause simply because, despite the best efforts of my noble friend Lord Wallace, I cannot understand it. To cover an extraordinary series of circumstances in which zombies might be resurrected seems less than satisfactory. However, that is a second-order point. We are now at a point where we have to get a conclusion to a most unsatisfactory situation. I hope that the Bill, as amended, will allow us to do that.
Lord Morris of Handsworth
My Lords, I have listened carefully to this debate and have also read some of the documents associated with the Bill. My first impression is that the Bill arises from a good old-fashioned dispute between an employer—the Government—and one of their trade unions. There is nothing strange about that. The employer wants to reduce its costs and the trade union wants to protect its members. However, it is on the process of dealing with the dispute that I want to comment. I say that because I see process rather than politics as the real issue here.
In a normal world, an employer would seek to negotiate a settlement and, if necessary, to have the issues properly dealt with through the medium of arbitration, conciliation or whatever mechanism is open for dispute resolution. That, of course, is the action that the Government always advise to others in disputes. “Go back to work, seek negotiations, go to ACAS”. There is nothing wrong with that advice. However, what we see today is a Government employing what I call the political sledgehammer of legislation to crack what is in reality a minute nut compared with all the other issues that they are currently engaged with. I worry about this because it sets a very dangerous precedent. It seems to me that the Government are saying, “You must abide by one set of principles while we abide by a different set”. Are we drifting into a situation where on every occasion that a trade union says no to an employer, a Bill will be introduced in another place and then come to your Lordships’ House?
The noble Lord, Lord Wallace, and the noble Baroness, Lady Noakes, blame the PCS for retarding the deal. I do not cast any blame. I say only that it was not the PCS that brought the issue to a shuddering halt but the High Court of our land. However, that is not new. The trade unions cannot win. If they take industrial action, they are wrong; if they go to the High Court and get a judgment to stop unreasonable behaviour, as the law interprets it and provides for, they are wrong. I recognise the need to amend the existing regulations but I say that this should happen through negotiation. We should negotiate first, find an agreement and then enshrine it in legislation, because that is the way that the Civil Service works. You do not legislate and then negotiate; you negotiate and then legislate.
The people who will be adversely affected by the Government’s proposals for a reduction are not benefit scroungers or people who stay in bed as a lifestyle choice, as it has been termed, waiting for the sun to set; they are hard-working civil servants—public servants. Many of them have made the choice of long-term security over a quick pay packet, and they serve all of us. Of course, in the current situation we recognise that job security is at the top of everyone’s agenda. Indeed, there is no secret about the number of public servants who stand to lose their jobs—at the last count, it was more than 500,000. That is the impending problem facing many civil servants.
I see this short Bill as having the propensity to do immense harm. It strikes at the very heart of what we are so proud of in this country—free, democratic trade unions—because it undermines the right of a trade union to say no to an employer. The trade unions should, and must, have the freedom to disagree without legislation being introduced to retard that course of action. Of course, I impugn concerns over the Government’s expediency in trying to get their legislation through, but the fact that they have sought to pursue this matter in another place with a money Bill indicates, to me at any rate, that all is not well in terms of the overall intention. The attempt to avoid scrutiny of the Bill, short though it is, only raises suspicions rather than engenders confidence. With this Bill, it seems as though the sledgehammer of legislation is being brought out to crack the proverbial nut.
Like everyone in your Lordships’ House, I wish to see a speedy resolution to this issue, as it breeds uncertainty, not merely for the legislators, but more importantly for the individuals involved and for those who depend on the public servants who provide public services. I wish to seek assurance from the Government. I should like to know whether the Government now intend to resort to legislation as a first step every time a trade union disagrees. Will the Government take their own advice and use the instruments which are available, such as ACAS, to resolve industrial disputes? Do the Government recognise the ruling of the High Court, as set out in the briefing to which the noble Lord, Lord Newby, referred?
Trade unions want not only free collective bargaining, which is one of the tenets of our democratic society, but they also want fair collective bargaining. The people affected and the people at the negotiating table see the proposals as neither fair nor indeed free. A commitment has been made from this side of your Lordships’ House to work with the Government to ensure the speedy passage of a Bill giving proper consideration to the need for some adjustments but equally recognising that the trade unions, by their contribution, can also bring about a speedy resolution for the benefit of all concerned.
Lord Brett
My Lords, I will echo a number of contributions by noble Lords but I start by declaring an interest. For 10 years, I was the general secretary of the Institution of Professional Civil Servants, whose new name is Prospect. It was then the second largest union with trade union membership in the Civil Service and it remains that today. At that time, in the days of national pay bargaining and then departmental bargaining, I had some 25 years of experience of negotiations in the Civil Service and before that 12 years in the private sector—not least under the watchful eye of my noble friend Lady Turner, who was my boss for a number of years.
In all that time, particularly in the Civil Service negotiations, I learned that getting a solution involved two very clear requirements: trust and motivation. There needed to be trust that both sides were seeking agreement and motivation to find the means to reach that agreement. I negotiated with many senior civil servants, some of whom are Members of your Lordships’ House, and a number of Ministers in the Cabinet Office, some of whom are also now Members of your Lordships' House, and never at any time did I find any lack of trust or motivation in seeking agreement. In no way do I impugn the motives of the Government, the Ministers in the Cabinet Office and the noble Lord representing the Government today or suggest that they have anything other than the same pure instincts of negotiation. However, that is not the problem; the problem is the Bill before us.
In this House, we also have many captains of industry, captains of finance and moguls of the retail sector who all have experience of motivating staff in large companies to achieve change, but I doubt that any of them would recommend, by accident or by design, the present situation facing the Civil Service. There is denigration. That denigration does not necessarily involve demonising by individual Ministers—Ministers are supportive of the Civil Service—but somebody has been briefing the press that there is a wasteland of inefficiency occupied by civil servants. If civil servants resent that, it is because the previous Administration placed on them year-on-year efficiency cuts of not less than 3 per cent, so there has been a long-term pressure on productivity. Yes, we hear of wage freezes in the private sector, but wage freezes are being imposed in the public sector also. Now we face massive job cuts.
I felt that in our discussions this afternoon, we on occasion got confused between the public service and the Civil Service. The Civil Service has not benefited financially as much as some other parts of the public service, but it looks like it will be hit just as badly as, if not worse than, some other parts of the public service in facing massive job cuts. To be added on top of that cake is the reducing of redundancy compensation.
Is that a way to motivate staff to reorganise and render substantial increases in productivity? I think that the answer is obviously no. If I was asked, “Do you see it enhancing trust?”, I would have to say, “No, rather the reverse”. Yet that is where we are in respect of this Bill. The issue is not what we would like to have but where we are, and this Bill is about coercing the Civil Service trade unions to the negotiating table and at the negotiating table. I share with the noble Baroness, Lady Noakes, a fear of negotiation by statute. At the end of the day, negotiations may lead to an impasse which, in governing a country, may lead a Government to determine that there needs to be a legal remedy. It is not normal to have that in front of the negotiations. When we have a clause, in Clause 2, that the Government say that they hope not to use and that they will repeal the day after there is an agreement, it begs the question whether that is helpful to the trust and motivation to bring about an agreement at all.
The other question is: what is the likely reaction of civil servants and their trade unions to seeking to coerce and bully them? The normal British reaction to bullying—going back hundreds of years in all four parts of this country of ours—has been to resist. Therefore, it will be counterproductive to reaching a negotiated settlement if Clause 2 remains in the Bill. Discussions are taking place—in good faith, I hope, on both sides—to find an amendment to the clause that will introduce the caps. We should be seeking to create the right atmosphere to bring that about. As my noble friend Lord McKenzie of Luton said, we want the Government and Civil Service trade unions to find an agreed solution in those discussions. We wish those discussions well, but the solution has to be acceptable to all.
We are told that, in that event, we will have the immediate dropping of Clause 2, but we will still have Clause 3—the zombie clause, although I would prefer to call it the twilight zone clause—which suggests that, even if there is a solution at that stage, there may be a retention or resuscitation of the clause in one or two years’ time. How does that help the climate of negotiation? How does that increase the degree of trust of the trade unions either at active level—the trade union negotiators—or at the level of the trade union members, who direct those negotiations?
What can we do to help? We must help to create the ambience for those negotiations to succeed. We therefore need to see how we can improve the Bill. I agree with my noble friend Lord Morris, and others, who said that the negotiating process is the way forward. Therefore, we believe that it would assist progress if we amended the Bill in the manner suggested by several noble Lords on both Government and Opposition Benches by removing the cap and the zombie clause in the hope that negotiations will bring a solution in early course. That would allow us to see the Bill in a much more benign form at Report. Those discussions can take place between now and then. I believe that we can help that in Committee by more thorough discussion of each of the clauses.
Lord Wallace of Saltaire
My Lords, I thank noble Lords for a serious and good-tempered debate. I should declare an interest as my wife was a civil servant for some time and my daughter is a civil servant. Many of us have great respect for the Civil Service as a whole, and I know that many noble Lords have similar close links to the Civil Service. I do not think that any of us intend to denigrate the Civil Service. The noble Lord, Lord Brett, referred to briefing. I regret to say that I do not think that anyone needs to brief the Daily Mail against the Civil Service. It has its established narrative and does not need prompting. One does not need to brief the Daily Mail against the Liberal Democrats either. It carries on with its narrative in the same way. It is unfortunately part of the way we are.
I reiterate that the aim of this Government—an aim which we share with the previous Administration—is to make the Civil Service Compensation Scheme affordable, sustainable and fair to civil servants and other taxpayers while, very importantly, providing protection for the lowest paid. It is our strong intention to do this through a negotiated settlement with the Civil Service unions. However, as the noble Lord, Lord Turnbull, remarked, the Bill is a regrettable necessity.
The noble Lord, Lord Newby, raised the question of whether we would like to be where we are. Of course we would much prefer to be in a different place. This is not—as the noble Lord, Lord Morris of Handsworth, described it—a political sledgehammer to crack a nut. It is not a question of legislation coming first and negotiations coming second. The current Government have been in active negotiation since they took office, and we remain in active negotiation. The previous Government were in active negotiation for 18 months. The legislation is here only because there is strong evidence that PCS has been dragging out the negotiations without a willingness to join the consensus which has been reached between the other unions and the employers about an acceptable package. Therefore we hope that the legislation will not be necessary, but it is here as a reserve power. So we have legislation as a reserve but negotiation as our strong preference. I regret to say that my understanding is that PCS has been very slow in replying to initiatives and has regularly delayed the date on which it will reply to government proposals. I understand that the PCS executive is at last meeting again today. We hope to hear further from them soon.
The noble Lord, Lord McKenzie, and the noble Baroness, Lady Drake, asked what the Government intend to do about Clause 1. We all understand that this is the most important clause in the Bill and that getting the language right is important for the Government and the unions. We therefore hope that consensus will be achieved by Committee stage on the exact language of this clause. We all also understand that consultation has a legal meaning. We need to get that absolutely right and, if possible, agree it with our trade union partners.
The noble Baroness, Lady Noakes, and others asked whether Clauses 2 and 3 are an appropriate use of legislative time and an important part of the Bill. We think that they are a necessary part of the reserve powers. These negotiations have been dragging on and the Government, like our predecessors, felt that it was useful to spell out a minimum level of support which would be there if we failed to achieve negotiated agreement. However, we much prefer to reach a negotiated agreement if we can. We are confident that—with the majority of the unions, but not yet with those representing a majority of the workforce—we are within sight of an acceptable agreement by consensus.
The caps set out in the Bill of 12 months’ pay for compulsory redundancy and 15 months’ pay for those who leave voluntarily under the scheme, represent the minimum below which the Government are clear that they should not go. The caps are a fallback if—following our discussions and what we believe to be the conclusion of a new workable compensation scheme, with terms improved beyond the caps—we find that, for whatever reason, we cannot implement the scheme. In other words, they are there to avoid having no choice but to revert to the old scheme, which looks increasingly like an historic anomaly and is not affordable.
Baroness Noakes
I am struggling with why, once we have Clause 1, which removes the requirement for consent, there is any requirement for anything else to be a fallback in Clause 2 with the underpinning of Clause 3. If Clause 1 takes away the need for consent and puts in place proper consultation, what is the necessity for any other part of this Bill?
Lord Wallace of Saltaire
I shall come in a moment to Clause 3, which is of course different. I am advised that Clause 2 is useful and necessary for spelling out the minimum that, under any conditions and without negotiation, the Government would offer. In answer to the point made by the noble Lord, Lord McKenzie, it is the Government’s intention to repeal Clause 2 by the time the new scheme is in force. Clause 3 allows for the Bill to lapse once the new scheme is fully in operation. That is the timescale under which we will allow the Bill to fall in the sunset clause.
Lord McKenzie of Luton
Can we be clear on that? Is the Minister saying that if there is a repeal of Clause 2 once the settlement is under way, he will be amenable to the removal of the revival provision in Clause 3, which could bring back the sunset clause?
Lord Wallace of Saltaire
The question of the zombie clause, the revival clause, or however one wants to put it, needs to be discussed further in Committee, when the Government may wish to return to that question in some detail with new proposals. All of us who have looked in detail at the legislation understand that sunrise clauses and revival clauses are a delicate issue for Parliament as a whole.
On turnover and natural wastage, I confirm that the Civil Service is suffering something of the order of 7.5 per cent a year. We nevertheless anticipate that the reduction in some areas will be a good deal more than that and that it will be necessary to ensure that the provisions set out in the Civil Service protocol for redeployment and assistance when people become redundant will be thoroughly available for all those who go through this scheme. Our preference is, where possible, for voluntary redundancy and redeployment, and we will be working extremely hard with the unions and with different departments to ensure that that is the case.
The noble Baroness, Lady Noakes, also remarked that there has been an explosion in public sector pay and that the private sector finds it difficult to accept the levels of compensation provided in the Civil Service. I noted in the PCS briefing, which was helpfully sent round to all of us, that the 1972 Act was intended to bring pubic sector packages up to the level of the private sector. The evidence to the Public Bill Committee from the Hay Group was that public sector packages are now in many areas better than those in the private sector. We are doing our best to keep them roughly in parallel. In the higher levels of the Civil Service, of course, the comparative level of award falls away, but this is partly because the narrower distribution of pay levels within the Civil Service does not compare to top executive pay.
On compensation, any statutory arrangements in relation to employment provide a minimum underpin for all workers. However, the Government are attempting, through negotiation, to provide an example to other employers of good practice in staff issues. Again I emphasise that negotiations are continuing and that a much more generous package than the minimum is on offer.
The noble Lord, Lord McKenzie of Luton, asked about human rights issues and accrued rights. The Government’s human rights analysis has been set out in the Explanatory Notes to the Bill. In sum, we do not consider that Civil Service benefits are possessions within the meaning of Article 1 of Protocol 1 of the European Convention on Human Rights. Even if, contrary to the Government’s view, the changes we propose are seen as representing an interference with possessions, we believe that such interference is fully justified in light of the pressing need to reduce the budget deficit.
As I understand it, the judgment of Justice Sales was not about accrued rights but about the form of agreement under the existing legislation. This legislation therefore removes the basis for the judgment of Justice Sales. In any event, I emphasise that the limits in Clause 2 do not apply to departures agreed before the Bill comes into force. We are not trying to take away from staff a right that has been upheld by the court, because the court did not rule that staff had a right to the current terms. The question is about the nature of the negotiations and the right of the unions to veto any agreement made. Again I stress that we have been, and continue to be, close to an agreement and I hope that we will succeed in reaching one.
Our intention is to provide amendments that both reinforce the requirement for the Government to consult and ensure that the extent and outcome of the consultation is made more transparent. This will be further informed by points raised today before we present the necessary amendments to your Lordships’ House in Committee.
I confirm that the level and quality of support offered to surplus civil servants who are made redundant will continue at the current level and that a copy of the April 2008 protocol for handling surplus staff situations is now in the Library of the House. That protocol will be updated to reflect the additional measures that the Government intend to introduce.
I hope that I have covered the points made by noble Lords in a serious and sober debate about what we all recognise is a difficult issue. I look forward to further discussions in Committee.
Transport: Investment
(14 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Earl Attlee
My Lords, with the leave of the House, I would like to repeat the Statement made by my right honourable friend the Secretary of State in another place.
“With permission, Mr Speaker, I would like to make a Statement on the Government’s investment plans for our transport networks. During the course of my remarks, honourable Members may find it helpful to refer to the documents that I have placed in the Library of the House and the Vote Office this afternoon.
As my right honourable friend the Chancellor explained last week, the decisions that we have taken to cut waste, end lower-priority programmes and reform the welfare system allow us to invest in Britain’s long-term economic growth and to prioritise transport infrastructure to support economic growth. We have already announced a green light for Crossrail and Tube upgrades, as well as plans for investment in low-carbon vehicles and recharging infrastructure and to take forward work on a high-speed rail network. Work is continuing on evaluation of additional investment in major rail projects and I expect to be in a position to make an announcement to the House in the next few weeks.
Today I can confirm a programme of investment in our crucial strategic road network, managed by the Highways Agency, and in our local transport networks. We will continue to invest in capital maintenance, spending over £5.9 billion over the next four years on unglamorous but important works to maintain the integrity of the network, both strategic and local. We have also allocated over £180 million over the four-year period for high-value minor enhancements to the strategic road network.
We are taking action to reduce the cost of proposed Highways Agency schemes by respecifying, renegotiating with suppliers and improving governance and control. Thanks to these decisions, I can confirm that funds will be available for sustainable upgrades to the strategic network to tackle congestion hot spots, delivering networkwide benefits that provide very high returns on investment.
I can confirm today that the eight Highways Agency major schemes currently under way will be funded to completion and opened to the public in the next two years and I can announce funding for 14 new projects to commence on site by April 2015, including the schemes announced by my right honourable friend the Chancellor last week. These are: the A11 Fiveways dualling; the M4 and M5 junction north of Bristol; the M6 between junctions 5 and 8 in Birmingham; the M62 between junctions 25 and 30 near Leeds; three schemes on the M1 between Derbyshire and Wakefield, from junctions 28 to 31, 32 to 35a and 39 to 42; four schemes near Manchester, from junctions 8 to 12 and from 12 to 15 on the M60, junctions 18 to 20 on the M62, and from Knutsford to Bowden on the A556; improvement of the A23 between Handcross and Warninglid; and the completion of the upgrading of the M25, with a managed motorway scheme for peak-time hard-shoulder running between junctions 23 and 27 and junctions 5 and 7. These essential investments will cut congestion, improve journey times and, most importantly, support economic growth. Every pound that we spend on these schemes will generate, on average, £6 of benefits.
I can also confirm that work will continue on developing a further set of Highways Agency schemes, ready to start in the next spending review period if funds become available. A detailed list is included in the documents to which I referred earlier. There is one last group of four current Highways Agency schemes that will be reviewed to see if they still represent value for money and can be progressed for the next spending review period.
As important as strategic roads are to the national economy, many of the highest value-for-money proposals are those that address the needs of the local road and public transport infrastructure that supports the economies of our cities, towns and rural areas. That is why last week we announced our commitment to completing major local projects worth over £600 million, including measures to improve access to Weymouth in time for the Olympics and acceleration of the work on the Tees Valley bus network, as well as confirming our intention to invest up to £350 million to complete the upgrade of the Tyne and Wear Metro. We also announced our intention to proceed with PFI schemes to extend the Nottingham tram network and deliver sustained improvements in highways maintenance in Sheffield, Hounslow and the Isle of Wight. My department will work urgently with the four local authorities concerned to ensure that we can deliver these schemes within the funding available.
My right honourable friend the Chancellor also announced last week that we will invest more than £900 million over the next four years on new local authority major schemes. They will include: a new bridge over the Mersey at Runcorn, partly funded by tolls; improving access to Leeds station; and extending the Midland Metro tram line from Snow Hill to New Street through Birmingham city centre.
I can confirm today that a further seven major local authority projects have also been given the green light, subject to planning and other approvals. They are: a new bus interchange and associated transport improvements in Mansfield; a new bypass that will take traffic away from communities in Sefton; an integrated package of sustainable transport improvements in Ipswich; major improvements to the M5 at junction 29, east of Exeter, providing access to new housing and employment areas; a bypass to the north of Lancaster, improving connections between the port of Heysham and the M6; improvements on the A57 east of junction 31 on the M1 near Todwick; and a new northern distributor road in Taunton to provide additional cross-town capacity and access to areas of brownfield land. These schemes, worth about £300 million in total, have been selected from a pool of projects with proven business cases. They are listed as ‘supported’ schemes and are shaded in green in the list that I referred to earlier.
But our duty is to ensure that every pound spent is essential. Even with these priority schemes, I expect local authority promoters to work with my department to ensure that every opportunity for cost saving has been taken and every source of alternative contributions fully explored before funding is confirmed in January next year.
While the House will welcome these decisions, Members on all sides will want to know how we are proposing to handle the remaining schemes. The £600 million-plus remaining for additional new projects after the announcements already made demonstrates the importance that we attach to local authority major schemes, but it will not be enough to fund all the schemes proposed by local authorities. I have therefore placed in the Library a list of all currently submitted schemes, including three schemes which previously had conditional approval and which we will now seek to progress to full approval, showing how we propose to categorise them.
For 22 schemes where my department has completed a value-for-money assessment in the past four years, we will invite best and final funding bids from this ‘development pool’—the schemes shaded in amber in the list. Promoters will be challenged by my department to consider the scope of a scheme, its cost, lower-cost alternatives and their ability to contribute more locally. Those who can make the best case are the most likely to receive funding, which will be confirmed by the end of 2011.
Further analysis will be carried out on another 34 schemes for which the department does not currently have an up-to-date assessment to determine whether they can go forward to join the development pool and bid for a share of the £600 million-plus funds available. These schemes are shaded blue on the list; a decision will be made by January 2011. This competitive process will ensure that the greatest possible number of schemes, offering the best value for money, is able to proceed, facilitating economic growth and providing jobs across the country.
Under regional funding allocations, regional and local bodies were encouraged to identify a large number of schemes for longer-term prioritisation, many of which were in very early stages of development with no business cases submitted to the Department for Transport. In the longer term, I want decisions on local transport priorities such as these to be taken out of Whitehall and placed in the hands of local people. My department will work with the emerging local enterprise partnerships and local authorities to identify the best approach to local decision-making on future transport priorities.
I have set out today the decisions that we have made and what they mean for our strategic and local transport networks. The measures that I have described will help to deliver long-term, sustainable and affordable economic growth in this country. The difficult choices that this Government have made have allowed us to invest in the future and I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Davies of Oldham
My Lords, I thank the noble Earl for repeating the Statement that was made in the other place earlier today and congratulate him on making the best fist of a pretty poor job. We all looked on the Secretary of State for Transport in his shadow role as some kind of Grecian figure with a huge club to wield on the public sector. Now that he has been translated to Secretary of State for Transport, we see that he is seeking to cover himself with some small fig-leaf of decency by investment in transport. But it will not do. He has not changed his visage or his perspective. This is not a Statement about significant investment in transport. It is a cover for limited investment in transport—a reduction of proposals under the previous Administration and no guarantee except in the most minimalist form of what will be delivered over the next four to five years.
If one looks at the major road schemes, apart from those that were put in place under the previous Administration, none of the new ones will begin until some time before 2015, if conditions allow. Certainly, they will not begin before 2015. There is no suggestion at all that they will be an investment of completion to the advancement of the nation, so delay is built into it. There is already an excuse for the delay because the whole document is presaged on the assumption that, if we can make the efficiency savings, if we can cut the waste at the rate at which we intend, and if we can get all the measures through in the way in which the Government intend, there may be some dimension for investment.
The Government will not get all they expect in terms of efficiency gains. They will not achieve all they expect in reducing waste. They will be disappointed in some areas and they will find difficulty in certain areas in getting their proposals through. After all, one element of the coalition might summon up some reserves of energy and resource at some stage to put a delaying tactic on certain aspects of these cuts. Therefore, we should look on these nugatory promises of investment for what they are: promises that are in the main contingent except where the scheme is already in place.
What we do know is where the cuts will fall. The Statement is about highway and local transport schemes but the noble Earl was very early on to the issue of rail and took pride in the fact that the Government are sustaining Crossrail. How could the Government do anything else with such a significant project? Crossrail, a rail issue, was introduced into this Statement about roads because it is an indication that the Government supposedly have their heart in the right place. Is their heart in the right place? The Government are prepared to contemplate increases in rail fares over the five-year period up to 2015—rises in certain rail fares of 25 per cent. Does anyone think that this will have anything but a detrimental effect on railway demand? Does anyone think that commuters and others will look at the choice between rail fares that are escalating and road costs and, having found the equation more to the advantage of road, move from rail to road to the detriment of our environment, to the detriment of our economy and to the detriment of the very objectives that the Government purport to secure through their overall railway policy?
What the Government are about is pricing certain people off rail. The Secretary of State for Transport indicated in a recent newspaper article that he expected some fares to go up by some 10 per cent, which merely indicates his economic innumeracy. It is quite clear that what is being contemplated is an increase vastly above that. For season ticket holders, we will see increases in fares of such significance as either to hold rail passengers to ransom or cause them to go on to our already crowded road system.
What is the case for rail is also the case for buses. There is a straightforward, unembellished clear cut in the subsidy to bus operators. What does that mean? It means higher fares or reduced services, or more likely both. We will see our rural areas become more and more dependent on the car because of this onslaught on the buses, and we will see the pressure reflected in the needs of those who have no access to a car but face increased bus fares.
What is also absent from this Statement is any comment about the cuts of more than 25 per cent in the resources of local authorities. What does that mean for crucial aspects of local authority operations? Certainly with regard to road maintenance it means a very great deal indeed, but it also means something to another dimension, on which the noble Earl was singularly silent in his Statement. I hope he gives some response to these questions. What does a cut to local authorities’ resources mean for road safety programmes? What does it mean to the ability to introduce and maintain road safety measures and monitor road safety? We will be watching this very closely indeed. We have real anxieties about the extent to which this Government seem to set at a very low priority the very significant improvement in road safety provision on our roads over the past decade or so. The British position is better than the rest of the industrialised world; it is the best in Europe. It is also a reflection of the significant amount of resources made available to local authorities, which have responsibility for road safety. The local authorities are to sustain a very significant cut. I say to noble Lords and particularly to the Minister that, if during the time when this Government are in office we see a reversal of the trend towards improved figures with regard to road safety, we will hold them to account, because they have set this issue as a low priority—so low that in this Statement about investment in highway and local transport schemes there is not one mention of road safety.
Earl Attlee
My Lords, I am grateful to the noble Lord for his reply to the Statement. It was a virtuoso performance, as I have come to expect from the noble Lord. He has very skilfully—and I am grateful to him—avoided the trap of asking detailed questions about the Statement, because it is accompanied by plenty of literature for noble Lords to read tonight.
The noble Lord suggested that my right honourable friend had done a pretty poor job. I think that he has done a really rather good job and that he has the ideal skill set for his current position. The Government’s top priority is deficit reduction. I wonder how much the party opposite would have had to cut the transport budget if it had won the general election.
The noble Lord talked about the difficulty of cutting waste and getting further efficiencies from organisations such as the Highways Agency. He is right; his party has plenty of experience. Why did we mention rail? My right honourable friend’s heart is in the right place. We believe in the future of rail and we are committed to Crossrail, High Speed 2 and other projects. I certainly look forward to debating how we are going to improve our country’s rail system.
The noble Lord talked about adjustments to local authorities’ road safety budgets. It is of course up to local authorities to determine their priorities and how they continue to drive down casualties. We will be monitoring the situation very carefully. During my time in your Lordships’ House, I have always paid the greatest attention to road safety, and that will not change.
The noble Lord mentioned the BSOG. I look forward to the Question for Short Debate that we will be taking shortly.
Lord Bradshaw
My Lords, I am not going to indulge in a lot of criticism, but I will ask a few technical questions, which I hope the Minister will address.
First, much of the paper is made up of words like “appraisal” and “value for money”, yet the system that the Government have adopted—the new approach to transport appraisal—is hopeless. I say this as an economist. The new approach puts value on a lot of valueless things, such as small time savings of a minute, half a minute or less, and it needs bringing up to date. Also, other road users such as bus users or cyclists need to be treated as valuable people. The new approach tends to assume that only car drivers are valuable people and therefore ascribes a lower value of time to those other users.
Secondly, will the Minister tell us something about hard-shoulder running, which is mentioned in the Statement? We do not yet know whether hard-shoulder running has proved to be thoroughly satisfactory from the point of view of both road safety and access by the emergency services to accidents.
Thirdly, I want to mention the PFI scheme, which is referred to in the Statement. Did the Minister see in the Sunday papers that the M6 toll road, which was built by PFI, is in considerable trouble because people will not pay to use a toll road when there is a free road beside it? The only solution, to my mind, is to introduce a system of road charging on our trunk motorways. Otherwise, there will not be many PFI investors.
Fourthly, road maintenance is in a disgraceful condition, and the Government should direct more attention to keeping the road network that we have in good and serviceable order rather than necessarily trying to expand it, because the road network does not work.
Fifthly, there are now lots of utility companies in this country, and all of them have near freedom to dig up the roads when they want and cause massive delays and damage to the road surface. There is supposed to be a system of traffic management, under which the utilities are supposed to apply to the local authority for permission to dig holes. Whenever they want to dig such holes, however, they put up a big sign saying “Emergency”, “Danger” or whatever. That does not mean that they do the job any more quickly, but it allows them to override the provisions in the Transport Act 2005 to regulate the use of the highway.
Earl Attlee
My Lords, it fills me with dread when the noble Lord says that he will ask me a few technical questions.
The noble Lord referred to some of the terms of our assessment and things like that. We need to ensure that the schemes with the best value for money, the best benefit to society and the best economic growth are the ones that go forward. The noble Lord has expressed concern many times, in both this Parliament and the previous one, about NATA. We are reviewing that process.
The noble Lord talked about hard-shoulder running. He will be aware of, I think, the M42 where the Highways Agency has trialled hard-shoulder running, which has been shown to work. I understand that the statistics have shown a safety improvement. Because it has been shown to work, there will be more hard-shoulder running schemes.
The noble Lord mentioned the M6 toll road, which is perhaps not getting all the toll income that it should. I remind the noble Lord that the M6 toll road is not PFI-funded but is a private road.
The noble Lord mentioned the condition of local roads, which is a matter of great concern. I think that the ICE’s State of the Nation: Infrastructure 2010 report states that the Highways Agency’s strategic roads are in quite good shape but local roads have serious problems.
Finally, the noble Lord also talked about the utilities. All noble Lords will be aware of the problem of utilities digging up the roads, sometimes in ways that are completely inconvenient. We are aware of that, but I will draw the noble Lord’s question to the attention of my ministerial colleagues.
Lord Berkeley
My Lords, since the election the Government have made great play of being a green and low-carbon Government, particularly committed to low-carbon transport. When one reads the Statement, it is extraordinary that it emphasises so many rail projects—most of which are irrelevant because they come under the major scheme—and very few road schemes, especially in the detailed list of 600 schemes, whatever those are. I am surprised. Perhaps the Minister could explain why the Statement mentions no local rail schemes or local tram schemes—except, I think, for one.
There is mention of a few bus schemes. Presumably, those will follow on from the enormous success of the Cambridge guided busway, which I think is two years late and has doubled in cost. Why anybody wants to replicate that around the country, heaven only knows.
There is nothing at all about cycling—no cycle schemes. I understand that the Government have cancelled the cycle training programme organised by Cycling England. Where is the implementation of the Government’s green agenda in this Statement? It seems to be business as usual, going back to the previous Conservative Government.
Earl Attlee
My Lords, I am delighted to respond to the noble Lord’s points about low-carbon and sustainable transport. Rail schemes will be covered later, as we are not talking about CP5 issues.
The noble Lord referred to problems with the Cambridge scheme. I have just signed off a reply to a Written Question on that, so he will get an Answer shortly. I accept that there are a few problems there.
The noble Lord talked about cycling and the situation with Cycling England. He needs to remember that, as I said the other day, the bikeability scheme will continue.
Lord Walpole
My Lords, I thank the Minister for the A11 Fiveways to Thetford improvement scheme, which will mean that Norwich—I do not know if any of you know where Norwich is—will be joined to the motorway network by dual carriageway to the south for the first time ever.
It is quite extraordinary that the A47 Blofield to North Burlingham scheme is being abandoned, according to page 1. In case the Minister does not know this, a new port has just been built at Yarmouth, so all the roll-on roll-offs will come along on the single carriageway, which will not be nice for them.
I cannot find anything in this document to do with improving the A47 or the A17, which connect Norfolk to the north, the west and the Midlands. In the yellow pages at the back, we find reference to the Norwich northern distributor road and the phrase “if it is worth it”. I can tell noble Lords, as ex-chairman of Norfolk County Council’s highways committee, that it is not worth it. It is not worth it because it was not built 25 years ago. It will be twice as long, twice as useless and will annoy twice as many people. Dear, oh dear—but at least the Government will get Norwich on the motorway.
Earl Attlee
My Lords, I am glad that the noble Lord is pleased about the A11 Fiveways project as it connects Norwich by dual carriageway. In researching the Statement, I found place names that I had never heard of. It is a little too challenging for me to comment on specific schemes, but parliamentary tools are available to the noble Lord, should he wish to use them.
Lord Higgins
My Lords, what is the definition of a congestion hotspot, as it is difficult to envisage a hotter congestion hotspot than that which exists along the south coast, particularly in the Worthing area? The scheme for a Worthing bypass got past the public inquiry stage something like a decade and a half ago, yet there has still been absolutely no action, particularly by the previous Government. In terms of economic efficiency, for a long while it has been quicker and much easier to drive from the south coast up to the M25, round the M25 and then down the M20 or M3 if one wants to get commercial traffic through the Channel Tunnel or to the Dover ports. Will my noble friend look into this whole issue as, in economic terms, it fully deserves to be included in the programme? No doubt the schemes that have been announced are very welcome, but I should have thought that this scheme ought to be given higher priority than those on the list.
Earl Attlee
My Lords, the noble Lord presents me with a difficult problem in responding to a specific scheme about which I know little. However, I will write to him.
Baroness Farrington of Ribbleton
My Lords, the noble Earl has referred on this and other occasions to local authorities’ ability to respond to these issues, when the Government are failing adequately to fund local government to enable it to do so. He told the House that speed cameras could be funded by local authorities and that this would save money. In actual fact, it has cost the Exchequer money because the income from speed camera fines was more than the cost of the cameras. The Government have pretended that they are protecting pupils in our schools but admitted at the weekend that there is a cut in real terms in the funding per pupil. I have no doubt that the Government will say that local authorities can make up all those shortfalls, including the shortfall in road maintenance for local roads. The Government are hiding behind the shift of responsibility from themselves to local government in order to avoid the flak for policies that will gain public opprobrium.
Earl Attlee
My Lords, as I said, our number one priority is to deal with the deficit. I understand the point that the noble Baroness makes—it is a good point—but local authorities will have to deal with this matter as best they can. They will have to make tough choices, just as my right honourable friend the Secretary of State has had to make tough choices because of the situation that we have inherited.
Lord Stoddart of Swindon
My Lords, I wish to refer to the schemes in the development pool, particularly to the Leeds new generation transport trolleybus experiment, which I am pleased to see is within that pool. I declare an interest as the president and trustee of the British Trolleybus Society.
I point out to the noble Earl that trolleybuses are successfully operating in many countries throughout the world and are a very good, cheap, low-carbon, non-polluting, silent and safe vehicle to operate in the urban environment. Therefore, I hope that this scheme will be left in and that we can have an experiment in Leeds, which I sincerely hope will lead to a further extension of the trolleybus system—a system which unfortunately was destroyed throughout the country, probably by the actions of the oil lobby.
Earl Attlee
My Lords, I thank the noble Lord for his contribution. By definition, a trolleybus is electrically driven and therefore has zero emissions at the point of use, which makes it a very attractive project. I look forward to researching this project, just out of interest on my part.
Lord Brooke of Alverthorpe
My Lords, would the Minister agree that it is difficult to accept that dealing with the deficit is the number one priority when an announcement is made locally that the £50 million made annually by the congestion charge in west London is likely to be abandoned in December, with all the attendant loss for the capital that will go with it? That sits neither very squarely with dealing with the deficit nor indeed with fairness, when one sees the nature of the people who will be the beneficiaries from the abandonment of the west London congestion area.
I should like to ask something more positive. Nowhere in the document is there anything that gives us great hope of seeing a strategic approach to many of the problems that we face. In particular, I pick up the point made by the noble Lord, Lord Bradshaw, about the massive cut coming in the maintenance of roads. Some £200 million is to be taken out every year over the next four years, after a particularly difficult winter. If we have another hard winter, at the rate we are going we will be like a third-rate country. Will the Minister please explain the criterion used to determine how the £200 million should be saved in each of the next four years? Is that to be done by local authorities or has some criterion been set for establishing that?
Secondly, which schemes have been totally abandoned? It is very difficult when reading the documentation to identify whether any have gone. My reading of it is that some have gone all the way. Will he please place a list in the Library?
Thirdly, are the Government giving any thought to alternative means of raising funds to reinvest in the road transport system? For example, a number of parts of the country were exploring the possibility of introducing congestion charging—not solely to raise funds but to reduce congestion—and such schemes would have been helpful in providing funding for reinvestment in other parts of road transport. Has that been totally abandoned by this Government? Does the noble Earl have any views on how they might explore alternative ways in which money may be raised?
Earl Attlee
My Lords, the congestion charge is not my responsibility but the responsibility of the Mayor of London.
On the difficulty of local maintenance, I shall write to the noble Lord. On the Highways Agency, it can do a number of things to better manage the strategic road network. It can build on the investment of the previous Government in better systems, to make sure that maintenance takes place at the right point—not too early and not too late.
As for the noble Lord’s question about local authority congestion charging, I should say that we have no intention of introducing a national scheme.
The road schemes to be cancelled because there is no foreseeable future for them are: the A1 Leeming to Barton scheme; the A19 Seaton Burn interchange; the A19 Moor Farm scheme; the A21 Kippings Cross scheme; the A21 Flimwell to Robertsbridge scheme; the A21 Baldslow scheme and the A47 Blofield to North Burlingham scheme.
Lord Beecham
My Lords, before the general election, visiting Conservative spokesmen who came to the north-east spoke warmly about the prospect of dualling the A1 north of Newcastle. Will he confirm that not only is there now no prospect of that happening for the foreseeable future but even smaller improvements to that road are not likely to take place as far ahead as one can see? Will he also bear in mind, when he talks about local authorities undertaking capital works, that the capital programme of local authorities is to be cut by 45 per cent?
Earl Attlee
My Lords, there is a slight glimmer of hope for the A1 north of Newcastle. We are considering whether it should be part of the strategic road network. However, this does not mean that it will be dualled any time soon.
Scottish Parliament (Constituencies and Regions) Order 2010
(14 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Tankerness
To move that the draft order laid before the House on 1 July be approved.
Relevant Documents: First Report from the Joint Committee on Statutory Instruments.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, as many noble Lords may know, the Boundary Commission for Scotland completed its first review of Scottish Parliament boundaries, as required by the Scotland Act, earlier this year. The commission submitted its Report on the First Periodic Review of Scottish Parliament Boundaries to the Secretary of State for Scotland on 26 May 2010, and a copy was laid before the Scottish Parliament and this Parliament on the same day. The Boundary Commission’s report was accompanied by two DVD-ROMs containing geographical information system data defining the constituency boundaries. This is referred to as “the deposited data” in Article 2 of the order.
This approach was necessary because a number of the recommended Scottish Parliament constituencies have boundaries that do not follow existing local government ward boundaries. Previous constituencies were made up of complete local government wards, which are defined in existing legislation and therefore could be referred to by listing the ward names. The level of detail required to define the constituency boundaries meant that they could not practically be shown on traditional maps at an appropriate scale. The local government wards and part-wards that fall within the constituencies are listed in the appendices to the Boundary Commission’s report, and the master copies of the DVD-ROMs have been deposited with the Secretary of State for Scotland for safekeeping. Reference copies are deposited with the Boundary Commission for Scotland, and copies are also available in the Library of each House.
The Scotland Act also requires the Secretary of State to lay before Parliament, as soon as is practicable after receipt of the report, the draft of an Order in Council giving effect to the recommendations in the report. Such a draft was laid on 1 July. It was debated in the other place on 15 September and approved, and now comes before your Lordships’ House. Ministers readily acknowledge that there have been some concerns about some of the commission’s recommendations. These have been raised with Ministers, but I emphasise that they have no power to direct the Boundary Commission to change any of its recommendations or to amend any boundaries through the order. The Boundary Commission is an independent and impartial body, and its statutory consultation and local public inquiry process allowed for consideration of concerns and representations about its proposals made by politicians, local authorities and others. Final decisions on recommendations were ultimately a matter for the commission. Details of the consultation, and local inquiries and their outcomes, are included in the commission’s report.
As I explained earlier, the order gives effect, without modifications, to the recommendations contained in the commission’s report. It defines the name, status and area of 71 of the 73 parliamentary constituencies, and the name and area of each Scottish Parliament region. The Orkney Islands constituency, which for eight years I had the privilege to represent in the Scottish Parliament, and the Shetland Islands constituency, were excluded from the scope of the review because Schedule 1 to the Scotland Act provides for them directly. The order is required to be approved by both Houses before being made by Her Majesty in Council. Subject to it being approved and made, it will come into force on the day after it is made. At this stage, we envisage that being some time in November. The boundary changes will not affect the Scottish Parliament, or elections to the Scottish Parliament, until the next general election to the Parliament, whether that is an ordinary or extraordinary general election. Nor will they affect any by-election held before the dissolution of the Parliament.
The Scotland Office consulted electoral administrators and the Electoral Commission over the proposed timing of the Boundary Commission’s final report, and on the proposed timing of the commencement of the order. Following the consultation, administrators agreed to start the necessary preparatory work in advance of the legislation coming into force, given the proximity of the next general election to the Scottish Parliament in May next year. The Parliamentary Under-Secretary of State also wrote to the Scottish Government’s Minister for Parliamentary Business and the Presiding Officer of the Scottish Parliament, among others, in early July informing them of the proposed timing of the legislation.
The Scotland Office also consulted electoral administrators on the impact and risk of the boundary changes being applied to any extraordinary general election called between the legislation coming into force and 5 May 2011, and on the impact of having to run any by-elections between 1 December and 5 February, which is the latest that a by-election can be held, on old boundaries. Administrators supported running an extraordinary general election after 1 December on the basis of new boundaries. As for by-elections, their view was that this was a localised risk that could be managed, should the need occur.
It will of course be our intention to keep all interested parties informed of the proposed timing of the commencement of the legislation and, subject to the order being approved and made, the Scotland Office will write to them in due course to confirm the commencement date. I commend the order to your Lordships’ House. I beg to move.
Lord Foulkes of Cumnock
My Lords, I had considered whether, in speaking today, I should declare an interest. Not only am I a Member of this House but for a short while longer I shall be a Member of the Scottish Parliament. However, I shall not be standing again for the Scottish Parliament, which has delighted a lot of people, and I shall concentrate my efforts, such as they are, in this Chamber, which has upset a lot of people opposite. Therefore, as these boundaries will not affect me, I do not think that declaring an interest is necessary.
It is a great pleasure to see here so many noble Lords from Scotland and I hope that they will participate in the debate today. Many of them were in the other place and served with distinction, and others were in local government. Indeed, there are some who served on the other side in the other place for a long time and I still call them my noble friends. I hope that they will participate, because some very important implications arise from what is being proposed.
As the Advocate-General said, these boundaries have been proposed by the Boundary Commission for Scotland, which has undergone a long and detailed procedure. It has been the procedure for considering boundaries north and south of the border for generations, if not centuries. It is well worn, well trued, well tested and well tried, and it involves the local communities. Proposals have been put forward, submissions have been taken by the Boundary Commission and hearings have taken place, and in many cases substantial revisions have been undertaken to take account of the representations made. Account has been taken of community cohesion and of local views on local authority boundaries. The Advocate-General said that they are not wards but he will concede that all the proposals take account of existing local authority boundaries. Throughout the time that I have been involved in these boundary reviews, community cohesion has been a very important part but unfortunately the equivalence of numbers now seems to be the only criterion that really matters. If that is the case in the future, it will be very worrying for local communities.
Let us compare that procedure, which has brought these proposals to us today, with what is now being proposed and has been considered in another place. I cannot remember the Long Title of the Bill but for simplification I call it the “gerrymandering Bill”, because that is what it is. It reduces the number of constituencies in the United Kingdom by 50—a totally arbitrary number. You might as well say that the MPs’ responsibilities have increased so greatly that the number should be increased, rather than reduced, by 50, but that would be equally arbitrary. I repeat: the proposal that is being put forward is totally arbitrary.
That is bad enough in itself but the really disgraceful part is that the whole democratic procedure, which, as I said, has existed for generations, is to be scrapped and set aside to rush these boundary changes through in time for the next general election. That is a total negation of democracy and is absolutely unbelievable. No account will be taken of community cohesion. No account will be taken of representation. No account will be taken even of local authority boundaries. The new constituencies, in some cases mega-constituencies, will not necessarily take account of local authority boundaries, unless, of course, you are one of the chosen few who—I say looking directly at the Advocate-General—come from Orkney or Shetland or the Western Isles; or happen to be Charlie Kennedy and represent a huge mega-constituency; or, in other words, who happen to be a Liberal Democrat. Maybe there is one SNP in this group just to cover it up, but basically, if you are Liberal, protection will be provided for you. That is the extent of the gerrymandering that is taking place.
I plead with the Advocate-General to go back to his colleagues in government and to ask them to think again about what we are considering here today. I have seen so many changes. I even remember that the late John Smith, the greatest Prime Minister we never had—his widow was here with us earlier, listening to our proceedings—considered that making representations to tribunals was so important that he was in Airdrie town hall the day before he died. All the extra effort might, sadly, have helped to bring on his death. That was how important he considered these democratic hearings.
It really would be outrageous if this gerrymandering Bill were to go ahead. We would then end up with the anomaly of having a democratic procedure for the Scottish Parliament—the Boundary Commission for Scotland would still have hearings, still consider representations, still consider community interest, still take account of local authority boundaries—while all that would have been swept aside for the House of Commons. So in the same United Kingdom we would have two completely different systems: one which continues to be democratic and involves the community and the other which would be a total gerrymander.
I urge the Minister to think again. The Bill will soon come to the House of Lords. I have no authority to warn the Government, but my gut feeling is that, even among Conservatives, Liberal Democrats and Cross-Benchers, there will be some for whom doing away with this democratic procedure will be so abhorrent that they will speak, and I hope vote, against it.
Lord St John of Fawsley
My Lords, I am most grateful to the noble Lord for giving way. As he glared at me benevolently earlier I imagined that he was paying me some sort of tribute. Would not it be a much better policy to stop pouring Members into this House, where we have neither the room nor the facilities for them? They impede the progress of our business and we do not need them. We have plenty of people who come here day after day and frequently cannot get into a debate because there are so many of these—I will not call them the nouveau riche since that would hardly apply as our allowances have virtually disappeared—nouveau pauvre, who haven’t even the excuse of coming here for the money.
Lord Foulkes of Cumnock
I am extremely glad that I glanced—I did not glare—in the direction of the noble Lord, Lord St John. Those of us who were in the House of Commons at the time will recall with great affection that he was one of the great revolutionaries, if I may use that word, or revisionists, or revisers. I am trying to get the term right. Those on the other side will not understand the subtlety of these terms as far as the Left is concerned. I have the right term at last: he was one of the great reformers of the House of Commons and instituted the proceedings of Select Committees. He is absolutely right. We now have 777 Members. If noble Lords, as I do, come in after prayers to try to find a seat, it is very difficult—especially when you are my size—to find a place to sit down.
Let us take the point made by the noble Lord. The rumour is now that we are to get 100 more nominations to this House, particularly from the other side. That is astonishing. So for every elected MP that we are getting rid of, we are getting two more nominated Peers. That seems totally daft, and I am very grateful to the noble Lord for intervening. I hope that the Advocate-General will pay even more attention to someone now very much on his own side than to me.
I want to make two last brief points. One is about by-elections. One of the problems with the electoral system—I made this point in a Question the other day—is that it is astonishing that if I were to retire tomorrow, there would not be a by-election, the person who was second on the list would take over. Tomorrow, if Margo MacDonald retired, there will be no one to take over because she is an independent Member. Tomorrow, if Jack McConnell was to retire, there would be a by-election and, from what we heard from the Advocate-General, on the old constituency boundaries, which could create problems in future for representation. That creates a problem.
I have one other point before I come to a conclusion. The boundaries will come in for either a general election or an extraordinary general election. I think that it is within the power of the Presiding Officer to change the date of elections to the Scottish Parliament. It has been suggested that the date in 2015 would coincide with the date of the general election for the United Kingdom which—in my view, and, I think, that of a lot of people—would have unfortunate consequences. It would be useful to know from the Advocate-General whether the Presiding Officer could take up the suggestion from Professor John Curtis that Scottish Government elections could move to early September rather than be held in May to avoid that clash. That is an interesting thought.
However, those two points are minor. My main point is that we welcome the recommendations. Several noble Lords have expressed individual concerns, as the Advocate-General said, but they represent a proper democratic process. I fear that, if the gerrymandering Bill gets through this House and through Parliament, we will never again have the democratic process for looking at boundaries for the House of Commons. That would be a real loss to our democracy.
Lord Maclennan of Rogart
My Lords, I rather question the premise of the noble Lord, Lord Foulkes, about this process being exemplary and democratic. It seems to me that an arrangement which results in an appointed commission making its final determinations, which this House is simply invited to rubber-stamp or overturn, does not have the subtlety of the democracy that we are more used to in this country. The fact that this House has no power to suggest modifications to the Secretary of State is a limitation. I question whether it is really appropriate that the order should come before this House at all.
I realise, of course, that it is done entirely in conformity with the Scotland Act, but with the benefit of 12 years of that Act being on the statute book, perhaps we might consider that it is time for an amendment. This debate is at risk of turning into a debate about entirely different parliamentary measures over which we have control. I somewhat regret that.
It has to be said that the Explanatory Memorandum to this order displays a degree of tortuousness in interpretation of the Scotland Act that, despite some years of training and practice as a lawyer, I find almost impossible to unravel. The suggestion that the order has to be enacted in the terms in which it does as it,
“would otherwise be unable to give effect to the terms of the Boundary Commission’s report”,
is an argument of political necessity, not of law. The conclusion is that paragraph 6(1) of the Schedule to the Scotland Act,
“must be read so as to allow such textual amendment as any other reading would deprive the Scottish Parliament (Constituencies) Act 2004 … of any meaning”.
It may be that those Acts have not been well drafted and that we should be reconsidering their language. It seems that the order allows a very broad discretion that is perhaps hardly consistent with the legislative activity in which we are engaged.
There are other examples. One referred to by my noble and learned friend when he introduced the order is the procedure for dealing with by-elections under this order and the date when the order takes effect. We are advised that the administrators have said that that is a “localised risk” that could be “managed” should the need occur. That is hardly legislating with clarity. It seems to be providing a discretion that is inappropriate and questionably democratic. I doubt whether this is a model of how to proceed in amending the boundaries of Scottish constituencies. The next time we are looking at amendments to the Scotland Act, I strongly recommend that we consider whether this also ought to be brought within the purview of that amendment.
In passing, because no one has the power to alter these proposed boundaries, I have to say that although the order may respect local authority boundaries, it does not respect existing local authority boundaries in respect of the mainland highland constituencies, in that we have a vast north highlands constituency, which is part of the north highland region. It is considerably too large to be effectively represented by a Member of Parliament. We ought to give some thought to those considerations when we come to consider the Bill that will emerge from another place dealing with Westminster parliamentary constituencies. I profoundly hope that we do not reach a position of such rigid equality of membership that the differences of community and geographical extent are completely set at nothing. That would be entirely to alter the nature of the relationship between a Member of Parliament and his constituency. However, I realise that I am straying into the territory that was entered by the noble Lord, Lord Foulkes, and that is beyond the remit.
Baroness Liddell of Coatdyke
My Lords, perhaps I may rise as a parvenu in this House—someone who I have learnt is neither wanted nor needed. I have been called many things in my life but “nouveau riche” is not one of them. I echo the points made by my noble friend Lord Foulkes about the nature of the process that has been undertaken in agreeing the boundaries for the Scottish Parliament. As the Advocate-General was speaking, I was reflecting on the fact that there is no end to the joy in the Scotland Office when such matters arise.
One of the sadnesses that I experience, having been out of this country for four-and-a-half to five years, is the extent to which the craft of politics has fallen into disrepute. It would be unfortunate if we managed to separate the representative—the Member of Parliament in the other place—from the history and the involvement that he or she has with his or her constituency. Anyone who has ever gone to a Boundary Commission hearing and has listened to some of the cases that are put will have heard the passion that exists on the part of Members of the other place for the constituencies that they represent.
My noble friend referred to the fact that the last speech made in Scotland by John Smith was to the Boundary Commission. As the Advocate-General is well aware, I was some weeks later to become the Member of Parliament for Monklands East and subsequently for Airdrie and Shotts, based on the argument that John Smith put forward that day at the Boundary Commission. I have to say that I was privileged to take his seat; I could never fill his shoes. The work that he did for the Boundary Commission was exemplary. Having been born and brought up in the constituency, I did not know the connection between Airdrie and Shotts and the covenanters, for example, but that is the nature of the involvement that people have with the constituencies that they represent. To seek to break that link is to further diminish the role of politicians in both Houses.
I understand that the coalition is intent on these measures and on removing the opportunity for hearings related to boundaries for the other place. It would be a regressive step. To operate just on the basis of numbers of constituents would be a fallacy. I have come back from Australia, where the size of constituencies can be startling. I once had cause to inquire of a Member from the Northern Territory about the size of his constituency. He said that he had 10,000 electors. I said to him, “But you must know the inside leg measurement of every one of your voters”. At that point, he replied, “Yes, but my constituency is the size of Portugal”. We do not quite have constituencies the size of Portugal, although the Advocate-General covered a vast area when he was a Member of the other place. Indeed, the noble Lord, Lord Maclennan, covered a vast area in Caithness and Sutherland. Within those areas—
Lord Maclennan of Rogart
The proposed North Highland constituency would be larger than Belgium, if not Portugal.
Baroness Liddell of Coatdyke
In some cases that might not be difficult, but I take exactly the point that the noble Lord has made.
In summary, it is easy for those looking on the proceedings of these Houses of Parliament to assume that we are all in it for number crunching and for our own nefarious purposes. However, people feel passionately about the places that they represent. If they do not, they should not even conceive of seeking to represent them in the other place.
The Advocate-General is a balanced and reasonable man. As a former Member of the Scottish Parliament, he will delight in pointing out how the procedures surrounding election to the Scottish Parliament are superior to that proposed for the future election of Members to the House of Commons. I hope that he will take back the strong views of my noble friends on this side of the House about separating the hearings system from the ability to set boundaries for the other place.
Lord St John of Fawsley
The provision rules that a Member may intervene twice in a Committee debate in order to explain his position. I did not have the noble Baroness in mind in the slightest. I merely say to her to clarify my position that she is the exception who proves the rule. To make it even clearer, I will lapse into my native Latin and say to her: “O si sic omnes”.
Lord McAvoy
My Lords, I shall speak briefly on a more localised point involving a bit of history. In 1975, the Royal Burgh of Rutherglen, as well as Cambuslang and Halfway, were incorporated into Glasgow District Council under local government reform. This met with great resistance locally at the time. I am a Rutherglonian born and bred and I make it plain immediately that the traditional saying, “Many of my best friends are Glaswegians”, applies. I have nothing against Glaswegians, but we are a more localised community and that is the way we like it.
The legislation was produced under a Conservative Government in 1973 and the incorporation took place in 1975. In 1995, under a more enlightened Conservative Government—I remember fondly the former Minister, Allan Stewart—we managed to achieve a more localised council. Our areas were incorporated into South Lanarkshire in the county of Lanarkshire, where we had been for 800 years, and that is where we want to remain.
I know that the Advocate-General is here to put before us the independent commission’s report, which we cannot alter or reject. However, there are two points on that which are relevant to my community. The constituency of Rutherglen, despite local representations from our own Labour and Co-op MSP, James Kelly, has, under these proposals, been incorporated into the City of Glasgow regional seat, with all the other areas in South Lanarkshire elsewhere. Our MSP campaigned for Rutherglen to be incorporated in the Central Scotland seat, along with other Lanarkshire seats. The local Labour Party channelled its point of view through James Kelly, which was fine, but we were undermined by the Liberal list MSP for the area, who campaigned that we should stay in Glasgow. Despite campaigning for years that Rutherglen should be separate, this Liberal list MSP campaigned against the wishes of the local community.
My noble friend Lord Foulkes of Cumnock has dealt with the thrust of the injustice and inadequacies of the Bill going through the other place and has explained how the local boundaries will be set for these reduced Westminster parliamentary constituencies. However, the Bill deals only in numbers and there is no capacity for local inquiries. The Explanatory Memorandum shows that a range of consultations took place—even the Scotland Office was consulted—to try to achieve a resolution of local concerns. However, given what is happening in another place, there will be no local inquiries and the issue will be dealt with only through numbers.
I can guarantee that any local political party in our area that campaigns for a Bill that deals only in straightforward numbers and involves Rutherglen being carved up and put in with Glasgow, with Cambuslang and Halfway being put elsewhere and other bits going to East Kilbride, will pay a terrible price, as will anyone who wishes to represent us locally in any form if they go along with the process. What is happening in the Bill is quite wrong.
My noble friend Lady Liddell has mentioned how strongly people feel; I epitomise that in spades. When we campaigned for a smaller council in 1995, every community council, tenants association, residents association and church joined the campaign. There were more than 1,100 people at the meeting in Rutherglen Old Parish Church campaigning for a more localised council. The Bill in another place will remove that at a stroke, which is undemocratic.
While I am quite harsh verbally about some Liberals, I cannot believe that Liberal Members of this House feel that this is right and justified. I cannot believe that of the majority of Cross-Benchers either. To be fair and accurate, a lot of Conservative Members do not like what is happening. To remove local representation at a stroke is undemocratic and illiberal.
I join my noble friend Lord Foulkes in appealing to the Advocate-General, even at this late stage, to use what influence he has to indicate that the removal of local inquiries is undemocratic, illiberal and unacceptable. If he has any doubts, I can organise a meeting in Rutherglen for him. While we will not erect the gallows before he comes, once he preaches that Rutherglen should be carved up he might find himself going up the steps to the gallows.
The Duke of Montrose
My Lords, I am very interested in all that noble Lords have had to say so far, particularly the issues raised by my noble friend Lord Maclennan of Rogart. I do not know whether he was talking more in general terms, but I would be fascinated to know whether the Minister can tell us if the Scotland Act contains powers for amendment. The Explanatory Memorandum, which I, too, found extremely confusing, says that Section 113(5) and (6) are to do with the power to modify secondary legislation but on no account may they modify anything in the Scotland Act or subsidiary legislation under the Scotland Act “unless otherwise stated”. Paragraph 6(1) of Schedule 1 then comes into play, saying that the Secretary of State may make provision for giving effect to the recommendations of the Electoral Commission. That is where the powers to make alterations are.
All this takes us back to the Scottish Parliament (Constituencies) Act 2004. As the noble Lord, Lord Foulkes, will remember, a proposal had been put forward to reduce the number of Members in the Scottish Parliament, which was sternly resisted both by Scottish parliamentarians and by the party opposite. I remember being in this Chamber as we passed that Act, but the fact that it had to be a separate Act of Parliament probably means that there are not really powers within the Scotland Act to do much in terms of alteration. There would have to be a totally new Act. It is a puzzle why the Explanatory Memorandum says that any other reading would deprive the 2004 Act of any meaning. Presumably the Act stands on its own. We are proposing amendments to Schedule 1 to that Act and presumably the powers exist for us to do that.
Baroness Adams of Craigielea
My Lords, I did not intend to speak tonight but I hope that the Advocate-General will take note of the passion that is felt, particularly on this side of the House, about what is happening in the other place. He started by giving us a list of the people who have been consulted on the order. Unfortunately, those people will not be consulted again on the constituencies that are to be represented in general elections. It will be simply number crunching and a question of what we are about to receive from the other place.
I have given evidence to three Boundary Commission hearings, when my constituency of Paisley North was being thrown from one side of Paisley to the other. As my noble friend Lord McAvoy pointed out, people in local communities are passionate about what they feel about the community they live in and the people who represent them. I was reminded that my noble friend once laid a Bill about Rutherglen in the House of Commons—I was a signatory. Like him, I live in a satellite of Glasgow—Paisley, in my case—and, although we loved our big brother dearly, we did not want to live in his house, so I was happy to support my noble friend then.
I come back to the Boundary Commission hearings. My colleagues mentioned the late John Smith. The last time that I saw him was as he was getting out of a taxi returning from giving evidence to his Boundary Commission hearing and I was getting into the same taxi to go north to give evidence to mine the next day. He felt passionately about it. He had spent all that day doing it and he came back ebullient; he was convinced that he had won agreement to what he had put forward, as, in fact, he had. Fortunately, so did I the next day. But, with what is coming to us, we will never have to do that again, because it will not be a matter for the communities who feel passionately about their area, who know it best and whose children go to the same schools; it will simply be a matter of whether you make up the numbers. It is no wonder that people are uninterested in politics. When they are just part of the numbers game, they will never be interested again.
Lord Watson of Invergowrie
My Lords, I echo many of the comments made by noble Lords on this side of your Lordships’ House during the past half-hour or so. I was struck particularly, and not for the first time, by the comments of the noble Lord, Lord McAvoy, who spoke in the only way he knows how as far as Rutherglen is concerned: with passion. He has done so many times over many years. He was able to refer to flaws, as he and some of his former constituents see it, in the way in which the new boundaries have been drawn up. There will be no process to enable him to do that when the UK parliamentary constituencies are revised, as noble Lords have said. Although that is not the subject of this debate, it is important that those points are borne in mind.
If—heaven forbid—the Advocate-General and the coalition were still in power when the Scottish Parliament boundaries next came to be reviewed, is it his understanding that the system that we are being asked to approve this evening would still exist, or would the Scottish system as well convert to the system that is being foisted on us for the UK boundary changes, which are designed to reduce the number of seats in the House of Commons from 650 to 600? It is pertinent to ask whether we will have the opportunity to deal with a similar order the next time round.
A more specific point that I wish to raise with the Advocate-General stems directly from the Explanatory Memorandum to the order—he referred to it to some extent in his opening remarks. Paragraph 8.3 states that,
“the Scotland Office consulted electoral administrators”,
on how the changes might be applied, particularly in respect of an extraordinary general election in the Scottish Parliament that may take place between now and 5 May, when the normal general election is scheduled, or if any by-election took place within that period. My noble friend Lord Foulkes commented on the anomaly whereby, in some cases, there would be a by-election for the Scottish Parliament and, in others, there would not. If an independent Member chose to stand down, how would it be dealt with? The noble Lord, Lord McConnell of Glenscorrodale, who recently joined your Lordships’ House, has announced that he will not seek re-election for the Scottish Parliament next year. If he should decide—and there is no indication that he will do so—to resign within the next month, it would cause a by-election. Could the new boundaries be brought into play for by-elections? Paragraph 8.3 of the Explanatory Memorandum states of the electoral administrators:
“As for by-elections, their view was that this was a localised risk that could be managed should the need occur”.
How on earth could a single by-election be run on new boundaries while the existing boundaries were still in place for everyone else? I am concerned that the electoral administrators can give that sort of advice. The memorandum states also:
“Administrators supported running an extraordinary general election after 1 December on the basis of new boundaries”.
I am pleased to see that that view has not been taken on board, because, as the Advocate-General has announced to us, the boundary changes would not come into effect if there were an extraordinary general election. But why does he believe that the electoral administrators gave that advice, which seems bizarre and would cause considerable confusion, if not chaos, in representation within the Scottish Parliament?
Lord Lyell
I have a question for my noble friend—I think that he is my noble and learned friend, although I am never quite sure about the old titles Lord Advocate, Advocate-General, and Solicitor-General. Certainly he is learned in the law. Would he briefly look at page 10 of the admirable document that we have in front of us? It has a coloured map—my sight is still reasonable—and I am fascinated by the little green sector marked “7”. I think it is classified, thank goodness, as applying to the Scottish Parliament. I was going to ask what we might be doing about boundary changes for what are known north of the border as Westminster elections, but which I call general elections.
I ask my noble and learned friend to glance straight above the figure 7 in the green sector—I am not necessarily colour blind, nor in any way religious so far as the noble Lord, Lord Foulkes, is concerned—where he will find a sort of pencil of land jutting straight in, surrounding the lovely town of Forfar. I am delighted to see that Forfar is now classified as being in Angus North and Mearns. I am sure that my noble friend Lady Carnegy will be delighted to know that it is in north Angus. Above all, will my noble and learned friend have a look at the north sector of that particular appendage? I believe that it follows the river South Esk. Having had some valuable insight as to the boundaries for the Scottish Parliament elections, can he say how they follow existing boundaries for borough, council or local elections? I am curious about that.
Perhaps my noble and learned friend can advise me. Are these boundaries for the Scottish Parliament? Under present rules, Members of your Lordships' House can vote there. However, under what may be proposed for your Lordships' House in the future—possibly in my lifetime, fairly soon—we shall not be able to vote in what we call general elections. Therefore, it would certainly be in my interest to know the boundaries for the general elections for Westminster. Today's legislation is purely dealing with the Scottish Parliament, so I am grateful for that.
I am even more grateful that my noble and learned friend has pointed out in the Explanatory Memorandum, in paragraph 7.4, that the DVD-ROMs, such as they are,
“have been deposited with the Secretary of State for Scotland for safe keeping”.
I think that it is now known as Fort Wallace and we are very happy that at least he can retain them.
Various noble Lords who have spoken have expressed the view that the by-election issue is a localised risk. This has been beautifully aired this evening in your Lordships' House and I hope that my noble and learned friend will be able to give me some advice about that. If he cannot do that tonight, perhaps he can write to me.
Lord McFall of Alcluith
My Lords, I speak to underline the comments made earlier about the sense of identity and community. When I entered this House I took the title Alcluith, which is the Gaelic name for Dumbarton. Literally translated it means rock on the Clyde. It comprises the towns of Helensburgh, Dumbarton, Vale of Leven and Clydebank—all proud of their heritage of shipbuilding, and all having a sense of community with the past.
Those areas were encapsulated in the county of Dumbarton. That stretched quite a bit in our area. The county of Dumbarton, going way back to the 1960s and earlier, had a sense of identity. Someone who was on the council in the county of Dumbarton is now the provost of the new Argyll area, Provost Billy Petrie. I have known Billy for many years. He was a fine politician who has been there for 40 years. He has served throughout that time. I mention his name because, as my noble friend Lord McAvoy said, with the Local Government etc. (Scotland) Act 1994, the Minister Allan Stewart, another fine individual with whom I have had very positive relationships in opposition and government while engaging in the political process, decided to take Helensburgh and the lochside area of Luss out of the area of Dumbarton and put it into Argyll. I base my comments on conversations that I had with him. The simple reason for that was that a number of local Conservative politicians in Helensburgh got a bit fed up with the obtuse attitude of a number of Labour councillors in the local area. I had sympathy for that attitude at the time, but I told them not to throw the baby out with the bathwater and that if they put that area into Argyll they would mix two areas with very little in common. All the economic interests from Helensburgh are eastwards and engage with Dumbarton, not northwards up to Argyll. Nevertheless, they went ahead with the change, all because of a short-term conflict, but with no long-term strategic consideration. I suggest to this House that that amalgamation made no sense.
Lord Martin of Springburn
I first apologise, as I was unavoidably delayed. I have listened to my colleagues and friends. The case put on consultation is so important. A boundary change was to be brought in in the city of Glasgow in 1983. The noble Duke, the Duke of Montrose—I think that is who it was—mentioned the Scotland Act. The original boundary report said that there should be no more than 71 seats for Scotland. The case that Glasgow had to put in the old city hall, the Candleriggs Hall, was that it was to be no less than 71, which meant that the city of Glasgow would lose not two seats but one. That meant a great deal, as the noble Lord, Lord Maxton, will know.
Consultation was so important then, as it is now. We had a QC, the late Hugh Martin, whose brother George was in the House. Hugh put the case, and he won because the presiding sheriff accepted his arguments. At the lunch break, when we still did not know the result, we went to a restaurant and had what they call in Scotland a “fish tea”. There was Donald Dewar, myself and Bruce Millan, former Secretary of State, and we agreed to pay for Hugh Martin’s lunch—it was the decent thing to do. I tell you, it was a lunch worth paying for, because we won. Even Donald Dewar, who was known to watch his pennies, weighed in with the bill.
In the west of Scotland, unfortunately, we have had sectarian problems, and we have managed to overcome them. A late colleague of ours, Frank McElhone, was a great leader in overcoming those problems. When he asked his honourable friend for Rutherglen, the noble Lord, Lord McAvoy, if the community organisations could come along, the Union of Catholic Mothers and the local Orange Lodge put the case in Frank McElhone’s constituency. That was bringing the sectarian groups together and calling for unity. They were unified that day, and they won.
I accept what the noble Lord, Lord Maclennan, has said about distance. I was a union officer both in Argyll and in the Highlands, and I had not realised how lucky I was, living in Glasgow, that I could get from A to B in a short time. To go from Fort William to Inverness was a major journey in itself for a lowlander like me, and there were places further north that were even more difficult to get to, yet these places are encompassed in the same constituency boundary. The law officer himself knows this; it was a surprise for me when I went to Orkney and I spent the night on the ferry. I had not realised that it would take so long—on the map, Orkney looks so close to the mainland. In fact, I met the noble and learned Lord there the other day when I was up there.
It surprises me that the Deputy Prime Minister, Nick Clegg, had a slogan throughout the general election that every vote should be equal and therefore we should have equality among the constituencies. Constituencies that are represented in the other place by Liberal Members are so far spread, yet no one even approached them and said, “Look, by putting this argument, you are destroying the argument for us to be good representatives for far-out constituencies”.
The noble Lord has mentioned Argyll. We in the west of Scotland are so fond of our country. It is lovely that within three-quarters of an hour you can go from Glasgow to the banks of Loch Lomond, but from the outskirts of Helensburgh to Campbelltown is such a distance that you could actually drive from Glasgow to Fort William quicker. By the time that you get to Campbelltown, you are further south than the town of Ayr, which my noble friend knows about—yet it is all the one constituency. This document says that it is giving us consultation, but the other place is saying, “You are not going to have consultation”.
I go back to my native city of Glasgow. People would go into Glasgow and think, “Well, it’s just one big city”. That is as naïve as going to London and saying that it is just one big city. Since I was 14, I have lived most of my life in Springburn. It is a far cry from Shawlands; it is a different world. The people of Partick feel differently from the people of Parkhead. They are different communities. In the old days they used to be boroughs in their own right, with their own police officers. I come back to what the noble Duke, the Duke of Montrose, said. There was an area called Grahamstown, which was named after his ancestors. In my younger days I stayed in the borders of Grahamstown and the Anderson district. The Anderson district is a far cry from the Gorbals, although the sketch writers never quite got that right. They did not know the geography of Glasgow.
I know from my experience of going to Boundary Commission hearings that even those Members of Parliament and those communities that felt they had lost out always felt, at the end of the day, that they had been given a good hearing at those boundary change tribunals. It would be a very sad day if we just threw numbers into a computer and said, “There you are. That is what your elected representatives have to fight for”.
Lord Teverson
My Lords, I will make a short intervention. I was born in Dagenham—made in Dagenham, effectively—which was then part of Essex and is now in occupied Essex, since it is occupied by the London Borough of Havering. I am interested in the debate on this order. I say to noble colleagues from Scotland: be thankful that, whatever this order and the Bill in the other House say, at the moment there is no question of boundaries crossing the Scottish-English border. I ask you to keep that in mind when it comes to other nations in the United Kingdom. Cornwall is a Celtic nation. I ask for noble Lords’ support when the other Bill comes to this House. There is a possibility of boundaries crossing the Tamar river. I ask the Government to take that into consideration as they think about the Bill before it crosses to this House.
Lord Hunt of Kings Heath
My Lords, I am very grateful to the noble and learned Lord the Advocate-General for Scotland for his introduction to this order, and for his explanation. I am also grateful to his officials for the helpful information that I received this morning. It has certainly been a wide-ranging debate. I am sure the noble and learned Lord is looking forward to responding to all the pithy questions put to him.
I would particularly encourage him to respond to the noble Lord, Lord St John of Fawsley. It is quite remarkable, given the current size of the House, that the Government are proposing to bring dozens of new Peers into the House. I am a member of the Leader’s Group, which is looking at retirement options because of concern about the size of the House. I find it remarkable, given that the Government now have a notional majority which we are seeing as the votes come through, that they seem determined to pack this House. It is difficult to see how this House can perform as a revising Chamber if the Government are determined to win every vote. What is the point of the second Chamber in that respect? I hope the Minister will respond to that.
As he said, the orders follow the submission of the Report on the First Periodic Review of Scottish Parliament Boundaries by the Scottish Boundary Commission. The intention is that they will apply to the Scottish Parliament elections in May 2011. I start by paying tribute to the Boundary Commission for Scotland. Clearly, not all noble Lords agree with the entire outcome of the commission’s work. However, I do not think that any noble Lord has criticised the thoroughness with which it embarked on this exercise.
Lord McFall of Alcluith
Perhaps I may paint a deeper picture for my noble friend regarding the River Clyde. There is a history to that, which entailed patients from my area on the north side of the Clyde going to Paisley. The Argyll and Clyde Health Board at the time decided to impose that. Its very obtuseness and refusal to listen resulted in the demise of that health board and the population being absorbed into Greater Glasgow. That was an example of hostility and lack of identity on both sides of the Clyde. It may be that the pages referred to by my noble friend use that as a case history and the commission said: “This far and no further”.
Lord Hunt of Kings Heath
I am grateful to my noble friend for illuminating our concern, because local inquiries allow for local matters and history to be brought to the attention of the commission. That cannot happen if you have simply a paper exercise.
Of course, the Government are determined to scrap the whole local inquiry process for Westminster constituencies, which means that the public will lose the opportunity for meaningful participation in it. That risks undermining the transparency and legitimacy of the current position. We then have the utterly absurd position, as I understand it, whereby the Government wish to hasten the abolition of public inquiries for Westminster constituencies in Scotland but such inquiries will continue for Scottish Parliament constituencies. I should like the Minister to confirm that that is the position of the Government and to have a go at justifying it.
While he is at it, the noble and learned Lord might comment on the boundary position more generally. On this side of the House, we have no problem with the principle of creating equal-sized seats, which has long been written into law and is the main purpose of the Boundary Commission’s work. However, the Parliamentary Voting System and Constituencies Bill pursues the objective of a rigid equalisation of seat sizes, which means that millions of eligible voters, predominantly younger people and those from lower-income groups, will be ignored by the Boundary Commission’s proposals and calculations. That will distort the results. Boundary Commission hearings will no longer be required to take account of history, local ties or geography, because the electoral quota will trump all other considerations. As a consequence, towns and villages will be divided between constituencies. Natural boundaries such as mountains, rivers and valleys will be overlooked. The vast majority of existing parliamentary constituencies held by representatives of all parties, regardless of the electorate, will undergo significant disruption as a consequence of the new rules and thousands of voters will be moved into and out of existing seats. In England, we have just gone through a boundary revision and we are just getting used to new constituencies, only to have them all ripped up.
This is a great pity and a tragedy. The future for Westminster constituencies represents a huge contrast to the way in which the Scottish Boundary Commission has gone about its work. I ask the Minister: why the difference in approach between boundary reviews for the Scottish Parliament and Westminster? It has no logic. It exposes the unsatisfactory and undemocratic nature of the parliamentary voting system Bill, which, I can promise the noble and learned Lord, we will subject to the most rigorous scrutiny possible.
Lord Wallace of Tankerness
My Lords, I thank all noble Lords who have taken part in the debate. It has been a very good one. My noble friend Lord Maclennan, who apologised that he would not be able to stay for the wind-up, put his finger on it when he pointed out that there was nothing that we could do. I suppose that we could vote it down, but neither Ministers nor noble Lords can amend this order. Possibly that is why we have ranged slightly more widely than the order itself. I did not expect when I came into the Chamber that I would have to respond, in a debate on a measure dealing with Scottish Parliament constituency boundaries, to questions about the number of peerages that are being created. I note what was said but I point out that a large number of Members have joined this House in recent months, of whom a number contributed today. Indeed, this debate benefited from what they said, so it would be unfair to say that the large increase is necessarily a bad thing when the contributions that we heard today were very good indeed.
I welcome the noble Lord, Lord Hunt, to debating Scottish matters. No doubt the excitement that he felt when he piloted the Marine and Coastal Access Bill and had to deal with all these important devolution issues whetted his appetite for dealing with even more Scottish points. I join him in thanking those who served on the Boundary Commission for their work, which comes to fruition in the report and in the order that we debate today.
There have been contributions from all parts of the House. I hope that I may mention without offending anyone the point made by the noble Baroness, Lady Liddell of Coatdyke, who talked about the passion that Members of the other place have for their constituencies. I reflect that there were a number of contributions to this debate from noble Lords who were once Members of the other place and some of that passion has not been lost. I understand it and think that it undoubtedly coloured and flavoured the debate. Perhaps we have had a foretaste of debates that are still to come and noble Lords have had a chance to rehearse their speeches for a piece of legislation that will come to us probably sooner rather than later.
I will deal with some of the specific points that were raised. My noble friends Lord Maclennan of Rogart and the Duke of Montrose pointed to the reference in the Explanatory Memorandum to complex wording and references. I note that paragraph 3.1 states:
“The Scotland Office recognises that the enabling powers could have been more clearly expressed so as to permit the amendment of those provisions”.
Certainly, I agree that we should look at the wording of the relevant provisions. It is well known that a Bill will be presented in this Session of Parliament to amend the Scotland Act. I say without commitment that that might be an opportunity to look at the matter and take on board some of these points about very complex wording.
The noble Lord, Lord Foulkes, said that there is a reference in the 2004 legislation to the Electoral Commission. In fact, responsibility stayed with the Boundary Commission and did not go to the Electoral Commission. Therefore, it is the report of the Boundary Commission that we are dealing with today.
The question of by-elections was raised by my noble friend Lord Maclennan and by the noble Lord, Lord Watson of Invergowrie. There is no question, as my noble friend seemed to suggest, that this is legislation with regard to by-elections. I will make the position very clear. If the order is approved by your Lordships’ House and subsequently approved and made when it is submitted to the Queen in Council, that will set the boundaries for the next election to the Scottish Parliament—be that the election scheduled for May next year or an extraordinary election that takes place before then. The election will be fought on the new boundaries and the electoral administrators are confident that that can happen from 1 December. With regard to by-elections, if they occur between now and 5 February—because any vacancy that occurs after 5 February would be held open until the election in May—they would be undertaken on the existing constituency boundaries.
Lord Watson of Invergowrie
I can accept that—the order is quite clear on it. My question concerned how he and his officials, or indeed the Boundary Commission, dealt with the electoral administrators’ suggestion that they could hold an extraordinary general election on the new boundaries and, it seems, that they could even deal with a by-election before 5 February, which is the cut-off date under this system. That is what I fail to understand. Obviously they lost that argument, but the fact that they could put the argument seems a little alarming.
Lord Wallace of Tankerness
Although the order was laid on 1 July, the Boundary Commission’s report was made available on 26 May and has obviously been in the public domain. Although the legislation is not in place, the electoral administrators have been working towards its implementation on the basis of what is in the order.
The noble Lord, Lord Hunt, asked what the main issues are. One of the most important issues is the compilation of the electoral register for the new constituencies. It is my understanding that the new electoral register will be published on 1 December and will reflect the new constituencies for the Scottish Parliament. It will be compiled on that basis. Obviously, if a by-election occurs, it will have to be fought on the existing constituency. It will require some work to put the electoral register together again for the existing constituency but, in the event of that happening, the electoral administrators are confident that it will be possible. It will not have to be done for the whole of Scotland but will be confined to one constituency. I hope that that answers the noble Lord’s question.
More generally on by-elections, the noble Lord, Lord Foulkes, made an interesting point about the different arrangements that can occur. Several noble Lords who have spoken in this debate contributed to, or at least were present at, the debates when the Scotland Bill went through another place and no doubt there are other noble Lords here who were present when the Bill went through this House. A number of us were also members of the Scottish Constitutional Convention, which proposed a scheme leading to the kind of situation that the noble Lord, Lord Foulkes, mentioned. Therefore, we all share the credit for that.
Lord Foulkes of Cumnock
The Minister’s noble friend Lord Steel of Aikwood has said to me privately—he has also said it publicly—that, having seen it operate, he now regrets that system and would like it to be changed. Does the Advocate-General agree?
Lord Wallace of Tankerness
It is certainly not the Government’s policy to change the system but I think that my party’s view on which system it would prefer is well known. Let us also recall that the voting systems commission was established under Sir John Arbuthnott at around the time of the 2004 legislation and it did not recommend any substantive change to the system. However, I can think of an election system in Scottish local government which would ensure that all vacancies were contested by way of a by-election, but I think that I am probably straying too far on that point.
Also on by-elections, I say to my noble friend Lord Lyell that these boundaries will apply to elections to the Scottish Parliament and not to general elections or elections to the United Kingdom Parliament—indeed, they will apply to the elections in which my noble friend can vote. I am not sure which constituency he is in, but I can certainly confirm that they apply to elections for the Scottish Parliament.
Perhaps I may pick up on some of the other points that were raised. I wondered whether the noble Lord, Lord Foulkes, was going to declare an interest, but he has no interest to declare because these matters will take place after he ceases to be a Member of the Scottish Parliament. The Scottish Parliament’s loss is no doubt our added gain, but we will wait to see. The noble Lord raised the issue, as did a number of noble Lords, about the inquiry system, but he also asked about the power of the Presiding Officer to change the date of the election. It is my understanding that the Presiding Officer can change the date by one month either way. My right honourable friends the Secretary of State for Scotland and the Deputy Prime Minister have spoken relatively recently to the First Minister and to the Presiding Officer about the possibility of the two elections being on the same day in 2015 and whether there are other ways of dealing with that to try to avoid that happening. No firm view has been taken yet, but the matter is under active consideration.
On the issue of inquiries, it is the case that a system of inquiry led to this order, which has been so greatly welcomed, lauded and praised that I am sure it will have no difficulty in getting through. That said, I could not help but reflect that my noble friend Lord Maclennan complained about the size of the north Highland constituency that has been produced under this system of inquiry. The noble Lord, Lord McAvoy, also indicated that he had argued, under the existing system, for Rutherglen not to be in the Glasgow regional area but to be in a different area. Of course, the present system did not assist him in giving him what he wished, although my friend in the Scottish Parliament who is a list Member for Glasgow obviously managed successfully to persuade the Boundary Commission.
Lord McAvoy
My Lords, would the Minister accept that the MSP to whom he refers went completely against local interests?
Lord Wallace of Tankerness
My Lords, that is clearly beyond this point. People from different political parties took different views.
I would also like to reflect on what was said by Professor Ron Johnston, who is a professor of geography at the University of Bristol whose research interests include electoral and political geography. On oral inquiries, he said that they are,
“very largely an exercise in allowing the political parties to seek influence over the Commission's recommendations—in which their sole goal is to promote their own electoral interests”.
Far be it from me to suggest that that was what happened, but I just ask noble Lords to wonder whether there might have been something of that when people needed to get lawyers—even if they had to pay for their lunch—to argue their case.
Lord Martin of Springburn
My Lords, we were not alone in bringing in the big guns. The Liberal Democrat Party had an eminent QC called Ming Campbell. I do not know whether he got a lunch, but our QC got a decent lunch anyway.
Lord Wallace of Tankerness
My Lords, there is no such thing as a free lunch. I take the point that one could not say that the Union of Catholic Mothers and the other organisation to which he referred were in any way partisan.
Lord Hunt of Kings Heath
My Lords, surely the substantive point is that, whatever the motivation of the parties who may come to the hearings, the proposals are put under public scrutiny. That will be missing from the Bill that will reach us very soon.
Lord Wallace of Tankerness
Let me make it clear that anyone, including members of the public, will still, under the proposals being discussed currently in another place, be able to have their say on the proposals. In fact, the proposal in the Bill is to extend the period for representations on proposals from one month to three. Furthermore, if proposals are revised, the Boundary Commission will be obliged to consult once more.
Lord Hunt of Kings Heath
My Lords, the point is that there can be a paper-based exercise in which comments are sent in and considered as part of the bureaucratic process, but the point about the local hearings is that the commission’s provisional proposals are really put to the test in a way that I doubt will happen if there is simply a paper-based exercise.
Lord Wallace of Tankerness
My Lords, I do not think that that is a fair characterisation of what one would hope would happen. I do not think that it is fair to say that members of the public who write in would be part of just a paper-based exercise by some bureaucratic crunching machine. Surely if people bother to write in—and they will be given more time to do so—one would expect that their views would be given proper consideration by the Boundary Commission. At the start, we properly paid tribute to the Boundary Commission and I think that that is indicative of the fact that, whoever the commissioners are, they will act impartially and independently and will give proper consideration to representations made to them.
A question of timing also arises. In the general election that took place this May, the boundaries used, certainly for England constituencies, were based for the first time on an electoral register that was 10 years old. More frequent reviews can help to address that issue. Many issues contribute to fairness in elections—I do not depart from the passion about communities that has been expressed by noble Lords, not least my noble friend Lord Teverson, whose comments I am sure will have been noted—but it is also important to recognise that out-of-date electoral registers or boundaries based on electoral numbers that are 10 years old are not exactly the best way to try to secure the fairness that one expects from a modern democracy. Therefore, a system that will allow reviews to be shorter will ensure that we are more up to date. I think that that would befit a modern democracy, but I have no doubt that we will go through these arguments on many further occasions.
I hope that I have answered most of the procedural questions, although perhaps not to the satisfaction of those who will continue to raise the issue of reviews. The noble Lord, Lord Watson, asked about the future position of Scottish boundary proposals. There are no proposals to change the system, but it is important to point out that the next review will not take place until, at the very least, eight years’ time and, at the very most, 12 years’ time—that is, at some time between 2018 and 2022. We will have had plenty of opportunity by then to evaluate the alternative system that is proposed. One would hope that good practice will inform any subsequent view as to what should happen in Scotland, but there are no plans to change and no pressing need to change either.
With those words, I again commend the order to the House and beg to move.
Home Energy Efficiency Scheme (England) (Amendment) Regulations 2010
Baroness Smith of Basildon
That this House takes note of the Home Energy Efficiency Scheme (England) (Amendment) Regulations 2010.
Relevant Documents: 7th Report from the Merits Committee.
Baroness Smith of Basildon
My Lords, I beg leave to move the Motion standing in my name on the Order Paper. I do so following the publication of the statutory instrument and the seventh report of the Merits Committee on Statutory Instruments. I am grateful to the Merits Committee for determining that the special attention of the House should be drawn to this measure. The committee made that determination not because the instrument in itself is necessarily controversial, but because the House can give proper consideration to the statutory instrument only with the benefit of the comprehensive spending review Statement. As we have now had that Statement and a brief time to digest its implications, I welcome the opportunity to raise some questions with the Minister.
It may assist your Lordships' House if I briefly outline the background to the Warm Front scheme, including both the benefits and the difficulties that arose. The Warm Front scheme provides assistance with the installation of heating and insulation to improve energy efficiency in a household and to reduce fuel poverty. Fuel poverty is generally understood to be where a household has to spend 10 per cent or more of its net income on fuel. A household must satisfy certain criteria in order to qualify for the scheme. An owner-occupier or private rented household is eligible where the household has someone over 60 in receipt of certain benefits, a child under 16 in receipt of certain benefits or other households that are deemed vulnerable to fuel poverty because of income or disability. Those who are eligible are entitled to improvements to the value most recently of £3,500 or, where oil, low carbon or renewable technologies are more suitable, £6,000. It is government-funded and managed by Eaga.
More than 2 million households have been assisted with energy efficiency measures in their homes and provided with a package of insulation and/or heating improvements. That is more than 2 million households now living healthier lives in warmer homes because of our changes. That benefits the individual through personal savings on energy bills—on average, about £250 a year—and, no doubt, ultimately, the Government through preventable NHS bills and by helping to meet our climate change commitments.
In terms of both environmental impact and cash savings to the household, the scheme has had a major impact. That is why we were willing to commit funding. In the financial year 2010-11, the budget for the Warm Front scheme is £345 million. The Government have now announced that it will be reduced to £110 million next year and £100 million in the following year. The scheme will then be disbanded and replaced by Green Deal and the Renewable Heat Incentive programme, details of which are, I understand, yet to be announced.
The Warm Front scheme was examined by the House of Commons Public Accounts Committee and the National Audit Office. Both made criticisms but saw the value of the scheme. The Public Accounts Committee was the most critical. Among its findings were that some of the measures on their own were unlikely to lift the householder out of fuel poverty, that it did not prioritise the least energy-efficient homes and that some of the poorest households may have withdrawn from the scheme because they were unable to afford their contribution. The committee was concerned that those in rural areas were harder to reach with this support. It also criticised the management of the scheme and considered that the maximum amount of grant should have been increased earlier. However, overall, it recognised that most customers were satisfied with the work and the Public Accounts Committee report makes a powerful case for doing more, not less, to reach those in the greatest need and for stimulating greater efficiency. The National Audit Office report of February 2009, as published on the DECC website last week, stated that the delivery of the scheme was largely effective and has provided value for money with some 86 per cent of households satisfied and 5 to 6 per cent dissatisfied.
Demand for the scheme has been high and the previous Government increased the funds that were initially made available. As a result of these reports, the department made a number of changes and has continued to assess the scheme. This is a process of continuous improvement. The SI before us today clarifies the circumstances in which an application must be refused to ensure that the Warm Front scheme operates within budget. In the Explanatory Memorandum, the Government admit that the possibility of refusing applicants will impact on vulnerable customers. Given that the scale of the reduction in the budget is no longer a possibility but a reality, it will most certainly impact on those in fuel poverty at a time when fuel prices are increasing rapidly.
The scale of the budget cuts to Warm Front in the next two years and its abolition after that give rise to real concern. I therefore have a number of questions for the Minister that I hope he will be able to address. I was able to give him advance notice of most of them. There are a couple I have thought of since and I will be happy to receive something in writing if he cannot answer tonight. However, I am sure he will have no trouble in answering. I shall speak slowly, which may be helpful in allowing enlightenment to arrive.
What percentage of the 2010-11 budget has been allocated to date? How many further applications have been received, and what is their total value? When does the Minister consider that the 2010-11 funding will have been fully allocated? I understand that previously once the budget for a financial year had been allocated, applications were assessed on the understanding that they would be carried over to the next financial year. Is that still the case or will applicants have to reapply if their application is rejected on the grounds that the funds for that financial year have already been allocated? What demand is anticipated for the years 2011-12 and 2012-13? Is the Minister planning any changes to the criteria for those years?
The Explanatory Memorandum to the statutory instrument confirms that this will impact on the vulnerable and that it will be closely monitored. Can the Minister tell me how the monitoring will be undertaken and by whom? I assume that the purpose of the monitoring is so that action can be taken if it is found that the measure is having a detrimental impact on those who are vulnerable. Can the Minister advise what action will be taken to address that, if it is the case, and will there be some method for reporting back to this House on the monitoring? The Explanatory Memorandum also states that all publicity materials will contain advice about other potential options. Can the Minister supply any further information on those options, their cost and who would bear it? Given that there will be no consultation on the statutory instrument, I put it to the Minister that, given that the policy outlined here is impacted on significantly by the budget cuts outlined in the CSR, a consultation on how best to manage it would be helpful.
We have already seen a number of studies about the impact on different vulnerable groups of the proposed welfare cuts. Given that this scheme is targeted at vulnerable households, can the Minister reassure me that an equality impact assessment will now be undertaken? Finally, if the Minister is able to say anything today about the Green Deal and the Renewable Heat Incentive programme that, in effect, replace the Warm Front scheme, it may go some way to reassure those who are concerned about the effects of this measure. I beg to move.
Lord Beecham
My Lords, I congratulate the Government on their prescience in bringing forward this statutory instrument just in time for the comprehensive spending review. As my noble friend Lady Smith has pointed out, the CSR included a significant reduction in funding for Warm Zone and for other schemes funded by a variety of agencies, including local authorities, the health service and other government departments. In the case of Warm Zone, a 60 per cent reduction for each of the next two years will be followed by the new scheme to which my noble friend has referred.
I come from Newcastle. I come not bearing coals to this energy-related debate but because two schemes are based in Newcastle. The first is a voluntary sector scheme devised by Neighbourhood Energy Action, which is now a national organisation and delivers the Warm Front programme. Warm Front has operated primarily in the private rented sector, as opposed to the owner-occupier sector, with which Warm Zone deals. It, too, is critically dependent on public funding and it remains to be seen what impact the comprehensive spending review and its consequences will have on its programmes.
As my noble friend has said, Warm Zone is managed by Eaga, which is also based in Newcastle. Eaga was assisted by the Newcastle City Council under the then leadership of the noble Lord, Lord Shipley, who is not present at the moment. The council purchased a £23 million building from the late lamented Northern Rock Building Society, or bank as it subsequently became, on the basis that it would house this thriving concern and pay a rent to the council. Of course, the prospects of that company are now significantly diminished. In the past year, its share price has reduced by two-thirds and just in the past few days it has dropped by around 10 per cent. So its future is certainly now open to question and, with it, the many homes that it would have assisted in terms of insulation works.
Apart from the works that both these organisations and others like them carry out, which are clearly prejudiced by the present situation and no doubt sooner rather than later presumably will fall within the scope of the statutory instrument, there are other aspects to what the organisations do. In addition to carrying out such works, they both work to assist people with the problems of fuel poverty. Both organisations have worked in the ward that I represent in Newcastle and throughout the city and elsewhere. They help with benefits checks across the range of welfare benefits to which people are entitled. If they are unable to proceed with their insulation programmes their significant contribution to the take-up of such welfare benefits will go as well.
Given the financial circumstances we now face as a result of the comprehensive spending review, while clearly there is a necessity for this statutory instrument, the implications go wider even than just the energy-related aspects. I hope that it will be possible in due course to restore the activities of both organisations and others like them to the level they have experienced in the past few years, so that they can carry out not only energy conservation programmes, which are environmentally beneficial to combating fuel poverty, but also help to combat other aspects of poverty and reduce the inequalities which disfigure so many parts of this country.
Lord Teverson
My Lords, the thing that interested me most when I read this rather obscure amending regulation was that it insisted that the Government pay the agency that had to do the work. I could not understand how it had worked in the past if there was no obligation on the Government to pay the agency that delivered this programme. However, the Minister may wish to come back on that.
Last week I had to leave the House to go to a conference before the comprehensive spending review was completed. I watched part of it at Heathrow as I waited to go to a conference in Japan where we discussed matters such as energy and climate change. I was struck by how good DECC—the Minister and his colleagues—had been in its tussle with the Treasury and my honourable friend Danny Alexander to achieve a good settlement for the environment and for energy in the review. Carbon capture and storage, the renewable heat initiative and feed-in tariffs, which many of us had feared would be significantly cut back, are still going ahead. It is good to see that the emphasis given to climate change and energy within the coalition agreement is being delivered in that way.
As the noble Baroness, Lady Morris, stated, the situation could change and the Warm Front scheme might have to come to an end during a budgetary year because of the funds running out. I regret that, theoretically, that could happen and that it is slightly more likely now. I realise that it will be the case in some areas because of the problems that we have with the national budget at the moment and the changes that we will have to bring forward in order to make the accounts balance sufficiently in the future. If that situation ever comes into being, cutting off a fund at a particular point would be an unfair way of rationing allocations. What plans do the Government have to ensure that any rationing will produce best value in terms of energy saved for those households that need the investment most?
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, in answering these comprehensive questions I shall lump them together.
First, I welcome the noble Baroness, Lady Morris, who has changed her name since I had tea with her this afternoon—for the record, I thought she was called Baroness Smith—who made an excellent first speech as the shadow DECC Minister. It was a factual speech which represented the situation fairly, adequately and comprehensively and I thank her for that. I also thank her for the pre-advice she gave me on some of the questions I need to answer. I am not sure that I have all of them but I shall do my best. I thank the noble Lord, Lord Beecham, and my noble friend and colleague Lord Teverson, who is always so excellent on these matters. He is missed when he goes to Japan but we know that he is doing valuable work out there on behalf of this subject.
I shall go through the questions as asked by the noble Baroness and pick up on them. What percentage of the 2010-11 budget has been allocated to date? As at the week ending 16 October, £310 million has been allocated; of this about £180 million has been spent. As at 16 October approximately 81,000 customers had made applications that are currently being actioned. This number takes account of customers who have dropped out of the process. We expect these applications and other costs to lead to further expenditure of about £130 million.
When does the Minister consider that the 2010-11 funding will have been fully allocated? The Warm Front budget for 2010-11 remains unchanged at £345 million—I underline the fact that it remains unchanged—and the measures will continue to be delivered throughout the year. The scheme remains open to new applicants this year while the resources are available to meet the commitments—that is what we have promised—and, at the current rate of applications, we expect the funding to be fully utilised by mid-December. I should point out that, despite the comments made by the noble Lord, Lord Beecham, and the spending review, the commitment has remained. There has been no going back on it and it has been honoured. Applicants contacting Warm Front after the funding has been fully allocated will be advised to reapply once the scheme reopens.
What demand is anticipated for the years 2011-12 and 2012-13 and are we planning any changes to the criteria for those years? We expect the demand to be lower in 2011-12 and 2012-13 because of changes to the scheme. Based on the available budget, we expect, as a maximum, to be able to help 60,000 households in year one and 54,000 in year two of the spending period. We will work to improve the cost-effectiveness of the Warm Front scheme by ensuring that it will be better targeted to help the most vulnerable. We will be consulting to make sure that the eligibility criteria reflect this.
Another question concerned monitoring. The scheme is monitored on a weekly basis to review the flow of applications and expenditure commitments. This is underpinned through the contractual reporting arrangements and will continue throughout the lifetime of the scheme. An equality impact assessment will be undertaken in advance of temporary closure to new applicants and we will also conduct an equality impact assessment on any proposed changes to the eligibility criteria.
Warm Front will continue until the Green Deal is launched. The Green Deal is a key element of our policy to improve household energy efficiency. It will help to protect people against price rises through greater energy saving, with special support for the most vulnerable. The new energy company obligations, starting in late 2012, will run in parallel with the Green Deal programme. It is intended to focus particularly on households that cannot achieve financial savings without additional support, including the poorest and most vulnerable and those in hard-to-treat homes. This includes offering a wide range of measures to improve energy performance, such as heating systems. As announced on 20 October, as part of our spending review, the renewable heat incentive will go ahead in 2011. We expect to be in a position to announce details of the scheme at the year end and to be open for business in 2011.
I hope that that deals with most of the noble Baroness’s questions. If she has more, I am always delighted to hear them. I hope that what I have said also picks up the comments of the noble Lord, Lord Beecham. I shall now respond to his comment about Eaga, about which he is obviously very knowledgeable.
Eaga has been contracted by the Government to deliver Warm Front since 2005. The contract provides for fees to be paid to Eaga, based on its delivery. We intend that the scheme should provide for the vulnerable; that was Eaga’s main task when it was set up. Given the statistics, the Government think that the scheme has not fully targeted the vulnerable. Fuel poverty has increased from 4 million to 4.6 million, which indicates that one of the things that the scheme was introduced to do has not been achieved to the desired end. However, that does not mean to say that Warm Front is wrong; we have been lucky to have it as an experiment. When something is not working completely, it is the job of government to recognise that and adjust it. That is why we have learnt from the mistakes made and developed two new policies. The social price support will generate £250 million of support, rising to £310 million by 2014-15, while the Green Deal will continue to offer practical support to households and will focus on the vulnerable.
Before the new schemes are introduced, we are consulting on how Warm Front should best operate and who are the most needy and vulnerable. We will then target those people for the delivery of these measures, which we hope to do by November. I hope that that explanation satisfactorily answers the questions that have been asked.
Baroness Smith of Basildon
My Lords, I thank the Minister for the care that he has taken in addressing the questions that have been raised today. I thank also the noble Lords, Lord Beecham and Lord Teverson. Tempted as I am to get the latter’s name wrong, I promise not to do so.
Lord Teverson
I humbly apologise. I think that that is the first time that I have ever got anybody’s name wrong in this House. I shall not do it again. From the Liberal Democrat Benches of the coalition, I welcome the noble Baroness to her Front-Bench position.
Baroness Smith of Basildon
That is very generous of the noble Lord. I am grateful. No offence was intended and none was taken.
While I would not accept the Minister’s categorisation of Warm Front as an experiment, I do not think that any of us here is wedded to a particular method. Our objective is to reduce fuel poverty and to help those who are in fuel poverty. If Warm Front can be improved, with a greater number of people enjoying better outcomes, I am sure that it will receive the support of the entire House. I am grateful to the Minister for looking at the scheme, but we will want to see how the measures that he has outlined progress—I am grateful for his comments on monitoring. The current scheme will run out of money by mid-December, so there is a need for progress. I look forward to seeing the consultation on the new criteria for targeting Warm Front. We will welcome further information. As I said, I am grateful for the Minister’s answers today. We will monitor the new measures as they go through to ensure that we reach those people who genuinely need help from government.
Motion agreed.